Getting a divorce is the end of one chapter of your life and the start of a new journey of your own. This new journey alone will be faced with many new challenges, but there is one factor of your well-being that tends to get overlooked: rebuilding or repairing your credit. It is a sad fact that many people emerge from a divorce with either no credit history of their own or flaws that have to be mended before they can be deemed worthy by a creditor. To help you get your credit score on track, here are four tips to rebuild your credit after a divorce.
1. Get familiar with your credit report.
A credit report is fairly easy to get and gives you a detailed outline of where you stand as far as your credit is concerned. Find out your credit score and get familiar with what your score means. Look at the creditors listed and accounts you have open, paid off, and in collections. Understanding all of the factors that are affecting your score is your first line of defense to rebuild and repair your credit. Be on the lookout for things like disputes and collections that can have a negative effect on your score.
2. Take care of name changes early on.
Some consumers assume that when they change their legal name after a divorce, they get to start fresh with a new credit history, but this is not the case. If you will be changing your legal name because you are getting a divorce, such as reverting back to your maiden name, it will be important to also let creditors know that your name has changed so they can update this in their systems and the changes will be reflected on your credit report. If there are name discrepancies in your credit report, it can inhibit your ability to get a loan later on. Having your name changed early after the divorce will help to avoid any confusion as you open new accounts, such as utility accounts that can come along with getting a new place.
3. Tend to joint accounts listed on your credit report.
Coming out of a marriage can mean that you have joint accounts still open that have to be taken care of. If these accounts are not resolved, your credit score can be impacted by how your spouse handles them, which can be a really bad situation if they refuse to make the payments. If there are accounts open jointly that need to be resolved, you may consider refinancing in only your name if possible or at least taking care of the payments yourself. Additionally, joint credit cards should be closed to get rid of the possibility of future unexpected charges.
Even though starting over after a divorce also means building your financial reputation, with a little attention and effort, you can see positive changes in your credit score. If you need help rebuilding your credit score, reach out to us at Build My Scores for advice.