If marriage is the most beautiful relationship between soulmates, divorce must be the ugliest. Even an amicable split can leave the finances of both parties in ruin. No longer is there another income to pay half the bills. More often than not, the credit rating of each spouse falls to shambles.
The good news is that getting through the divorce was the hardest part. While I would not define it as easy, rebuilding your credit after divorce isn’t so bad compared to what you’ve just been through. If you can live through that, you can do anything. So put your chin up and get to work. Here’s how you’re going to rebuild your credit and get on with your life.\
Get a Copy of Your Credit Report
You can’t get where you are going if you don’t know where you are. By requesting a copy of your credit report, you can know how far you have to go before you reach your goal. The government has set up a website where anyone can get a free copy of his or her credit report: AnnualCreditReport.com. Don’t mistake a credit report for a credit score, though. They are not the same thing. A credit score will cost you money. One copy of your credit report per year will not.
The point of getting your credit report is to kick your ex-spouse’s debts to the curb. Because you had joint accounts, lived at the same address and probably shared the same last name, there are likely to be items in the report that don’t belong to you. If you see any accounts that are not yours, contact the creditor and have your named removed. Then follow up in 90 days or so to be sure your name is no longer there.
Cancel All Joint Cards and Accounts
While I’m sure you when through and canceled all accounts that you held jointly with your ex, take the time to double check. Divorce is messy and it’s easy to make mistakes when you are upset. Now that the worst is past, it’s time to double check that you did everything right and cancelled all joint accounts.
Secure a Credit Card of Your Own
Get a small credit card, even if it means a secured card, for about $500 or so. This gives you a chance to use your credit and begin building a positive history. Use the card only for items you would buy anyway, and pay off all but a small balance every month. While you save more money paying it off in full because you won’t pay interest, carrying a small balance actually improves your score. Go figure.
Remember the Importance of Timely Payments
I know you know, but I cannot stress this enough. Pay your credit card bills on time! Set a reminder for 10 days before the bill is due and pay it on that day. That leave plenty of time for payment to clear and ensures you won’t damage your delicate credit situation. Also do this for utility bills like phone and oil, accounts that sometime report to credit bureaus.
Bankruptcy is a Last Resort
If there’s no getting around your debt, you may need to consider bankruptcy, but try as hard as you can to negotiate your debts into affordable monthly payments. Otherwise, you’ll be starting from scratch again, without the ability to borrow for another two to seven years.
Divorce is nasty, but you can emerge from the ashes like the phoenix. It takes persistence, discipline and smarts, but you can do it!
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