Finances suffer during a divorce no matter how cooperative two adults are, due to the costs associated with legal proceedings and reestablishing a single-income household. Once your divorce is finalized, rebuilding your credit as a single adult should be one of your first priorities. Without the cushion of an additional income, especially if you were a stay at home parent or spouse, the ability to qualify for credit is often the only safety net a person has. Taking these first steps to rebuilding credit after a divorce could prove invaluable in the future.
Check Credit Reports
Obtaining copies of your credit report from each of the three major credit bureaus (TransUnion, Equifax, and Experian) should be done immediately after your divorce is finalized. Having a recent copy of your credit report allows you to monitor what items are listed and who has completed a credit inquiry. If there are debts being reported that you did not cosign for or that your ex-spouse was ordered to pay, you will need proof that your former spouse is not complying with the divorce decree or that debts are being reported incorrectly. Do not hesitate to report anything that is being reported inaccurately.
Pay Debts on Time
While rebuilding your credit, no financial obligations can be taken for granted. Pay each debt you are responsible for on time, including utilities. Even debts that are not reported to the credit bureaus can cause problems later if you need to move to another home. Utility companies may request high deposits or refuse to approve you for flat rate budget billing if you have a history of late payments. Also make sure joint obligations with your former spouse are being paid on time. Do not rely on your spouse’s word that payments are being made since his or her failure to make timely payments can negatively impact your credit score.
Establish New Credit
Establishing new lines of credit on your own can increase your credit score by proving your ability to make timely payments on your debts. Obtaining a modest line of credit in the form of a credit card with a low limit, a department store, or other charge account that is report to credit bureaus helps build a positive credit history. If your credit was severely damaged by your divorce to the point of not being able to obtain unsecured credit, consider obtaining a secured credit that requires a deposit or ask a family member to cosign on a line of credit to help you establish your credit.
Discuss Your Options
Separation and divorce can have unexpected consequences on your financial life. Talking to a family law attorney prior to making any decisions will help you prepare for how seriously your credit or finances may be affected. The attorneys of Vayman & Teitelbaum realize how a divorce, separation, or custody dispute can strain your finances while affecting your credit. We are prepared to work with you to decide how to proceed. Contact one of our four Atlanta area offices today in order to schedule an appointment.