Getting divorced is expensive. There are many unplanned changes you have to deal with in a moment of urgency. You could be going from paying for one shared residence to two separate homes.
It is a no-brainer that this would cause a gap in your finances, and the situation would only exacerbate when the legal fees are put into account. A divorce takes a toll on your emotional well-being.
The last thing you want to deal with is a financial disaster, like drowning in your former spouse’s debt. Jay Burns, the Founder, and CEO of Covenant Missions, here are four ways to improve your credit score after a divorce.
Every Decision Counts
First, you must know that every intelligent financial decision will save you worry and care altogether. In the process of either building or rebuilding credit, you want to ensure your bills are covered, and you are narrowing in on your debts if any. You may have been accustomed to cost-sharing, but you need to restrategize with that option unavailable.
If your current income and child support (if applicable) are not sufficient, then you should consider working extra hours or finding a part-time job or a better-paying job all the same. Whatever your source of income, manage it well. If you are not used to being the manager of finances, ask for help from someone you trust so that you can come up with a viable budget.
Understand Your Responsibilities
Most couples usually have co-signed credit cards. A divorce does not mean you are off the hook to pay off joint debts. Should your spouse take over the card after the split, make sure to keep tabs on the accounts on the card because, in the legal sense, you are as answerable for any debts and late payments as the other person. This card still affects your credit score. According to some state laws, some collection agencies could still collect debts despite being off your credit report. Note that your divorce is not on your credit report. The last thing you want to do is end up in court against your ex-spouse over such matters, so take responsibility early enough.
Address The Matter of Joint Accounts
If you want total control and financial freedom from your ex-spouse, you must address joint accounts and debts. An ex-spouse could easily ruin your finances with an action like draining a joint checking account.
Do a refinancing, a balance transfer, and a consolidation so that each of you can be responsible for their finances. Open a checking account to deposit your paychecks and make credit cards and bills payments.
If you didn’t previously have any credit in your name, apply for just one national brand card like the MasterCard. Use the card regularly but wisely; charge it, then pay the balance entirely each month.
Lastly, you do not want to get into a messy situation when you already have so much going on, so when you come across companies that sell a quick fix to all your financial problems, think twice. If you hear suggestions like not to pay all your bills, run away. Suppose they are asking for a hefty upfront fee, runoff. You should read between the lines and understand that they do not have your best interest at heart.
While at it, if you have it in mind to change your last name to your maiden name, do so and get your new accounts in your new legal name.