Divorce comes with unique monetary burdens. If you suddenly become fully responsible for bills or need to worry about child support payments, you may be scrambling to afford the process. It is crucial to tackle these new financial obligations head-on or else you may find yourself falling behind.
If you fail to fulfill your new responsibilities or create your own accounts, your credit may suffer. Thankfully, there are plenty of things you can do to protect your finances and rebuild your credit during and after divorce.
Protect existing credit
Your divorce will not relieve you from joint accounts. You will remain liable for any joint debts and loans, including car payments, credit cards and mortgages. Here is how you can handle this and preserve your good credit:
- Close joint accounts - This is one of the first things you should do when you are ending your marriage. Talk to your ex and contact your creditors to determine who is responsible for certain accounts.
- Pay your bills - Until you separate yourself from joint accounts, you cannot afford to miss payments. Submit the minimum payments at the very least. Late payments will show up on your credit report and damage your ability to get new credit.
- Take a look at your property - Consider what you need to do with your property, such as the family home. You may need to sell it and split the proceeds or refinance it.
Remember that you may be responsible for paying on joint accounts, even if your ex does not make payments. A late-paying spouse may cause you to get negative information on your credit report.
Establish independent credit
You need strong credit separate from your spouse. Consider starting with a secured credit card or a card from a department store. Always pay your bills promptly and you will build up an excellent credit history to help you survive financially.