During divorce, couples split everything they own. No matter how financially stable most people were before divorce, they often walk away with less than half of their assets. Frequently, divorce negatively affects credit. It takes time, but you can make sound financial decisions to repair your situation following a divorce.

Cancel Joint Accounts

If you still have bank or credit card accounts with your ex-spouse, you don’t have control of your credit. Restructure mortgages and account balances so each debt is only in one person’s name. If you decide to leave any accounts open with both of your names, make a plan for monitoring transactions and payments. Missed payments will affect your credit score even if your ex-spouse agreed to pay them.

Find Out the Details

Make a plan to repair your credit by requesting a recent copy of your report from all three credit bureaus. AnnualCreditReport.com supplies a free report every year. If you’ve already used your free copy, obtain an updated copy from each bureau, or request it from FICO.com.

Your credit score contains three digits that predict how likely you are to repay debt on time. Reports will tell you if you have negative information so you can focus on what to do next.

Assess Your Debt

Evaluate your adjusted income and expenses to develop a realistic view of your situation. If you have the resources, start to pay down debt and eliminate past delinquencies. Sometimes following divorce, both individuals struggle financially, and paying off old debts isn’t possible. Work with a qualified consumer credit counseling agency and/or a trusted financial planner to analyze your situation and develop a plan for addressing bills. In some situations, it may be necessary to file bankruptcy.

Start Building a Positive Credit History

If you’re going to change your last name, do so before you apply for new credit accounts. Talk to existing lenders, and have them update your information so everything you do going forward helps build a more positive picture of your financial situation.

Obtain credit under your new name, applying for a secured card if necessary. Borrow a small amount every month, and pay it off in full before the payment deadline to start building a positive credit history. If you have trouble getting credit from the institutions you used to use, an online search can help you find cards for people with credit problems. Be sure to vet these cards carefully, pay your balances on time and monitor progress.

Talk to an Experienced Minnesota Family Law Attorney

Divorce comes with months, sometimes years of difficult decisions. Seek advice from qualified tax, legal and financial professionals. The Minnesota family law and divorce lawyers at Brown Law Offices have been representing clients since 1998. Contact us for a confidential, thorough case evaluation.