Between court costs, alimony and child support, divorce can quickly throw your finances into disarray. Unfortunately, credit concerns add yet another complication, especially if you failed to establish a credit history while married. Thankfully, it’s not too late to repair your credit; follow these steps to get back on track:
Check Your Credit Report and Dispute Inaccuracies
If you’re like many divorcees, you suffer a shockingly inaccurate credit history. Examine it closely and dispute negative items if you believe they’re undeserved.
Separate Accounts From Your Spouse
The sooner you restructure your debt and separate your financial affairs, the better. Negative actions can otherwise reflect badly on your newly established credit. Consider consolidation, balance transfers and refinancing to establish an independent profile.
Seek New, Individual Credit
In addition to closing or separating shared accounts, open up at least one account all on your own. Begin with a basic credit card, and build from there.
You will likely find it easier to establish a separate credit history if you and your spouse previously held joint accounts and made regular payments. It’s always possible to improve your credit, however; cards designed for poor or fair credit may help. Consider cosigning with a responsible friend or family member. Many will be happy to help in the immediate aftermath of your divorce.
Avoid Missed Payments
As you work to separate joint accounts, continue making payments on time. Try an automated approach, or stick to the minimum payment until you get your financial affairs in order. Even a single missed payment can compromise your credit score and make it difficult to start fresh after divorce. Close joint credit cards as soon as possible to avoid unforeseen charges.
Avoid Bankruptcy, If Possible
Bankruptcy may be the only solution to your current financial woes, but beware: it’s not an easy way out, especially if you’re currently struggling with alimony payments. Make every effort to handle your financial woes via alternative means before turning to bankruptcy.
A favorable property division or alimony outcome will make it far easier to maintain a strong credit history. Get in touch today to learn how the law firm of Barna, Guzy & Steffen, Ltd. can guide you through the financial aspects of divorce.