Based on our previous article, you already know, how changing your marital status can affect your credit score. Now it is time to rebuild credit after divorce. Fortunately, there are proven ways to sort out all inconveniences caused to your credit report once you are done with your ex-partner. Starting anew with a clean slate is something you should aim for and here is how to achieve it.
How to Rebuild Credit After Divorce? Step by Step
There are multiple ways a divorce can affect your credit score. As soon as all the legal process is over, it is time to get matters into your own hands. In many situations, pre-existing financial issues may have contributed to the divorce, so these added bills are merely exacerbating the situation. It will take time to repair your credit, but every solid financial decision will get you closer.
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Take a look at the 7 major steps on your way to rebuild credit after divorce:
1. Get a Credit Report
Before you hire a credit fix expert, take a look at your credit score by ordering copies of your credit report. Get one from each of the three main reporting agencies, i.e. Experian, Equifax, and TransUnion. Knowing your credit score will provide you with useful insight upon which you can proceed with credit repairs.
2. Financially Separate from Your Ex-Spouse
Getting a divorce means more than separating from your spouse since it also stands for financial separation. Most of the hard work should be done during legal action. However, you might want to tie any loose ends by cutting the financial cord with your ex. This means closing all joint accounts as well as credit cards.
3. Create a Credit Rebuilding Strategy
Taking some time to build a roadmap for your economic recovery is a good way to start. A professional credit consultancy agency can be helpful, although you can also do it yourself. Even a simple spreadsheet can be helpful when you focus on your next steps to rebuild credit after divorce.
4. Open Individual Accounts
Time for complete freedom and separation by establishing your bank accounts for savings and managing money. If you have returned to your maiden name, be sure that all legal changes have been taken care of. You want your fresh start to be successful and fruitful without any unnecessary legal issues.
5. Always Pay on Time
Paying all financial obligations on time is crucial if you want to rebuild credit after divorce. These responsibilities may include bills, mortgage or rent payments, loan repayments, car loans, or credit cards. Show the world that you are capable of managing your own finances so that your credit score gets higher.
6. Develop a Monthly Budget
Make a list of your new income and spending as a single individual, taking into account all income and expenses. Add up the money you spend on bills, food, repairs, insurance, etc. Knowing your monthly budget will help you decide what kind of credit to apply for when the time comes.
7. Rebuild Credit After Divorce
The last step when you want to rebuild credit after divorce is being patient and consistent in your activities. Once you sort out all your expenditures and revenue, keep track of your new financial order. Your personal credit score will get back on track in no time.
Rebuild Credit After Divorce – a Summary
A divorce is never a simple process for anyone. Nor is the way you rebuild credit afterward. Things like that can take a serious amount of time, therefore, you have to stay on track no matter what. Be responsible and keep faith in a better future. Take good care of your finances and everything will work out just the way it should.