When you’re going through a divorce, you may have plenty of concerns on your mind – so it’s easy to overlook something that’s generally in the background of your life: your credit.
Many people don’t think about protecting their credit until they’ve already discovered some damage when they go to apply for new housing, a credit card or a car loan – but a divorce should hopefully inspire some self-protective actions.
Obtain copies of your credit report
Get a copy of your credit report from all three major credit reporting agencies (TransUnion, Equifax and Experian). A careful review can help you understand your current credit standing and identify any joint accounts with your spouse.
Close all joint accounts
If you have joint credit card accounts or loans with your spouse, you (or your spouse) may need to pay off or refinance joint debts to remove your name from the accounts. Closing joint accounts is critical to protect yourself from debts that are not yours.
Establish individual credit
If you primarily relied on joint accounts during your marriage, it’s time to establish credit in your own name and start building a credit history. This can be helpful for both your financial independence and future financial endeavors.
Pay your bills on time
It’s a stressful time, but stay on top of your financial obligations and pay your bills on time. Late payments can negatively impact your credit score, and that can negatively affect your options as you embark on a newly single life.
Create a budget
Create a realistic post-divorce budget that reflects your changed income and expenses. You may need to make some rapid adjustments to your spending habits and plans. If you’re finding it challenging to navigate the financial aspects of your divorce, consider consulting with a credit counseling service. They can provide guidance on managing your credit, budgeting and rebuilding your financial stability.
Navigating the intricacies of a divorce can be tough, simply because there always seem to be a lot of “moving parts.” Seeking experienced legal guidance can help you focus your attention where it will matter the most moving forward.
