Divorce is a new beginning and time to turn a new page. One of the changes that you may have to deal with is repairing or rebuilding your credit. That may be the last thing you want to deal with in this tough time, but it’s important to get your credit rebuilt so your life can progress. Read the steps below to see how you can gain a solid credit footing.
Make a Budget
Rebuilding your credit is not a complicated process. It can be as simple as paying your bills on time. Being able to pay all of your bills on time though, is not always so easy. The easiest way to ensure that you can pay your bills is to have a steady income large enough to cover your bills and your expenses (and perhaps the expenses of your children). A simple and easy-to-use budget will help you manage your income properly. A budget will allow you to set money aside for your bills and expenses; it will also allow you to save and create a cushion.
Check Your Credit Score
A good place to begin is to see where your credit is at. Where do you fall in the credit score range? Your credit score may be in good shape, or may be worse than you thought. You will also be able to see what is dragging your credit score down. You can get a free credit check through AnnualCreditReport.com
Attend to Debts
If you have any joint debts with your ex-spouse, make sure that they are dealt with. Joint debts will not allow you to have the freedom you need to improve or take care of your credit. Try refinancing the debt, or transferring some of the debt to either your name or to that of your ex-spouse. Until you make arrangements for the debt, just be sure that you are making the payments in a timely manner.
Get Help with Bills
A lot of couples struggle financially years after a divorce. If the bill payments are building up, get some consumer credit help. A credit counsellor will help you find the best way through all of the payments. Bankruptcy, in extreme cases, may be advised as well.
Change Your Name
If you share a name with your spouse, change your name back to your maiden name before applying for any new credit. Mind you, this won’t restart your credit. Your credit is not based on your name but on your social security number. However, it will provide you with a fresh start going forward.
Build Your Own Credit
Try getting your own credit card. To build your credit, you need to show you are able to use credit in a responsible way. Make sure all the payments are met; otherwise, you’ll be back to square one. Keep the balance of the credit card below 25% of the credit limit. Some good financial common sense will put you onto the right track. Don’t live above your means and pay your bills on time each month. Stick close to your budget. It is good to get things under control early on so that a balanced budget will be part of your new lifestyle.
Are you ready for a fresh start? Share some of your experiences with us below in the comment section.
Guest author Greg Smith works for a divorce lawyer in Clearwater. In addition to legal advice, he often provides financial tips to his clients too.