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Are you recently divorced or have been divorced for some time? Rebuilding or continuing to maintain your credit after divorce may not seem like a priority right now, especially if you are still healing from the end of your marriage. If you want to finally get a credit card in your name, finance a vehicle or home, and even start a new job, you need to make sure you have a good one. Credit score. Why? Your credit score will affect your ability to get a loan, rent a house, or get hired for that job. To be where you are today, you should have the highest possible credit score.
Following are my top credit repair score tips before and after divorce:
o Cancel all joint credit card accounts in your marriage. This will protect your credit records in case your ex-spouse decides to access them. If the loan is in both your names, it will remain a liability to you until it is repaid.
o All accounts held by you while using your husband’s surname should be changed to the name you are using now. This will help rebuild your credit score.
o Start building a personal relationship with the bank of your choice and the banker with whom you did not do business at the time of marriage. Open a new account or maybe a little CD.
o Quickly set up accounts in your name, so you can start rebuilding your credit.
These are the ones I use when I coach my personal credit score clients.
step 1.
What is your credit score today?
Order a copy of your credit report. Be sure to get a copy from the top 3 credit bureau providers as information varies greatly. Make sure all information about you is correct and that the division of debts is accurately reflected.
If you have errors on your report, you may wish to contact a reputable credit repair firm for assistance as this can sometimes be a challenge. If you want to do it yourself, contact all creditors and bureaus and provide them with the proof they request. After all corrections and updates are complete, reorder your reports in 3 months to make sure everything is being reported correctly and nothing has reappeared. (it is often)
step 2.
Do you have your own credit score? If not, establish credit in your name.
If you do well! Keep building a good credit score. You can follow my tips from below.
If you don’t have an established credit score to your name, start rebuilding it today. Now is the time to start.
You might not qualify for a prime credit card right now, that’s okay. You might consider applying for a store credit card or gas credit card. If you’re approved, charge a small amount monthly and pay it in full on time. You are starting to build a good credit score now.
Another way to build an excellent credit score in your name is to apply for a secured credit card or take a small loan from a bank and use property or your savings as collateral. The same applies here, make your payments on time every month and don’t carry any balance during your rebuilding phase. You’ll start building a consistent credit history, which will boost your credit score and make it easier to get approved for unsecured credit in the future.
step 3.
make your payment on time
Your great credit score is built on longevity of on-time payments, so the more you pay your bills on time, the higher your score. Money can be tight after a divorce or at any time, and sometimes you’ll have to juggle your bill payments.
The following are my personal recommendations for the order in which you pay your bills:
1. Payment of mortgage or rent
It is one of the most heavily weighted items in the scoring algorithm. So, make sure you make these payments on time or your credit score will suffer a lot.
2. Loan for Car, Motorcycle, Boat etc.
If you depend on your car for various activities, keep these payments current. If not, you run the risk of withdrawing it.
3. Credit Card
Whether you want to pay them in full or make minimum payments by the due date. Credit card accounts are now being reported after a delay of 5 days (in allotment cases). This will also prevent your interest rates from rising and help you avoid late fees.
4. Utility Bill
You will want to make the minimum payment necessary to ensure that your utility services continue. Reconsider what facilities you have. If you need to cut, cable and land line phones are always an option to cut.
5. Health and Auto Insurance Premiums
If you own an auto many states require auto insurance, this is one bill you need to be sure to pay. With health insurance, you may want to increase your deductible to lower your monthly premiums.
6. Secured Loan
Be careful with them. If they don’t get paid, the creditor can repossess the property that was used to secure the loan. If you absolutely can’t make the payments, you need to see if you can give the asset to the creditor without hurting your credit.
7. Unsecured Loans
This includes all other loans. For example, to your solicitor, doctor, hospital and any other service provider or professional. Mostly, as long as you pay a small amount monthly, these accounts will be fine. If you absolutely can’t make that month’s payment, contact them and they’ll usually work something out with you.
step 4.
pay off your debts
A high debt ratio hurts your credit score. The most effective way to improve your score is by not carrying balances or paying off your loans.
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