How often do you think about your credit score? If you’re like most Americans, you probably think about it quite a bit. We are conditioned to believe (and sometimes worry or obsess) about our credit score; almost everything we do depends on it and is measured by it. And yet, even after prioritizing your financial health and working to maintain a good score, unexpected life events like divorce can disrupt those plans.
While filing for divorce will not affect your credit score, everything that happens next could. So, what can you do to protect your credit score or get back on track when things start going in the wrong direction?
Credit and Divorce Don’t Mix! Here Are 5 Ways To Protect or Rebuild Your Credit Score
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Assess your existing credit situation.
After gathering all your debt information, you need to get a copy of your credit report. Be aware of your credit score, monitor it regularly, and check for errors or inaccuracies. You can subscribe to all three credit reporting agencies for free to stay informed and catch any changes.
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Separate joint accounts.
One thing that can wreak havoc on your credit score is maintaining joint accounts with your spouse. Even if you pay your obligation, you will still be adversely affected if your partner does not. As soon as you are able, separate your credit cards and loans. If you can’t get this worked out early on, the divorce decree will spell this out, so there is no room for error as you go forward.
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Create a budget and payment plan.
It goes without saying that everyone can benefit from creating a budget. You may have had a budget as a married couple, but now is the time to make a realistic budget that reflects your new situation. Along with a budget, develop a plan to tackle any debt you end up with from the divorce.
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Pay bills on time.
One of the best things you can do to rebuild your credit is to be diligent about paying your bills on or before the due date. This includes not just credit cards but utility bills, rent, loans, and other expenses. In addition, paying more than the minimum due on credit cards or paying balances in full will help you make even more advances toward rebuilding your credit.
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Build credit in your name.
After divorce, you are no longer linked to your spouse and can begin building your own credit. Open an account in your name, make small purchases, and pay the balance in full each month.
When you face divorce and divide assets and debts with your spouse, staying on top of your situation from the outset is important. After all, you do not want to be the last person to learn about your credit situation. Remember, this is a process and will require patience. By following these tips, you will be well on your way to rebuilding your credit.
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Please consult an attorney for advice about your situation. The material on this website and in this or any blog article we publish are for informational purposes only and do not constitute legal advice. The Christman | Daniell Attorneys’ attorneys believe in tailoring legal advice and solutions to your circumstances.
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