Speaking of credit

No matter how careful you are, divorce may still be rough on your credit rating. I have even heard of couples staying married to avoid the damage to their credit. Getting yourself back together after a divorce is hard enough. Here are a few tips for getting your credit back together.

Look for a job. If you were a desperate housewife or a Mr. Mom, you are now going to have to join the workforce. You’re on your own now, and those bills won’t wait. You have to be employed at least part time to begin re-establishing your credit.

Rent a house or apartment. You didn’t get the house, so now you have to put a new roof over your head. Know this: the more permanent that new home is, the better. Lenders and creditors get suspicious of people who move around a lot. They wonder if you move so often because you don’t want your creditors to find you. Find a house or apartment where you are comfortable and stay there for as long as possible.

Cancel joint accounts. At this point you may have noticed that you will not be married any more. Any bank or credit card accounts from your marriage should be canceled or changed to one or the other’s name. Be careful of attempting to do this after the case has been filed you may be in violation of a courts injunction. This includes credit cards for which you are listed as an “account holder” or as a secondary card member. The goal here is to build an INDIVIDUAL credit history. This goes much quicker when the accounts and credit cards are only in your name. Get your name off his/her cards and get his/her name off of yours.

Apply for credit. You just cancelled all your old cards. Go get a new one! Disclaimer: please be careful to get one with a low interest rate, and always remember that having credit is not the same thing as having money. Don’t spend what you cannot pay off in a reasonable time, as late or missed credit card payments will undo any good work you’ve done building your credit back up. Also, check the paperwork if a case has been filed you may not be able to change accounts, cancel cards, or remove names from credit accounts because of an injunction that a court has put in place.

Or you can get a "secured" credit card instead, which works like a prepaid credit card. You load up the card by paying money to the issuer. You now have "credit" in the amount that you paid in. Most of these cards are specifically for people with bad credit or no credit, and the financial institution will report your positive payment history to all three of the major credit bureaus.

Did you change back to your maiden name? Be sure to tell all your banks, credit companies, and federal agencies (the IRS likes to know your real name) about the change. While you’re at it, give them all your new address, too.

Many divorced women decide to change their name when they divorce, either back to their maiden name or to a new surname entirely. If this is the case, make sure to inform all financial institutions, lenders, and federal agencies about the change. At the same time, you can inform them of your new, current address so that you can begin to build a solid credit history.

Get a new bank account in your name only. Remember we closed the old joint ones already? Actually, get two: a checking account and a savings account.

Establish a budget. Actually this should probably have been the first tip. Think about what you make, what you own, what you got in the divorce, and whether or not you were awarded maintenance or child support (more on these in a bit). Determine how much you can afford to spend each month and STICK TO IT.

If your credit took a serious hit or you have little or no credit history, you may need a cosigner to get your credit going again. A friend, family member, or colleague who has a good credit history will sign on your credit application with you. This person will then be guaranteeing your debt if you don’t pay. This person should be someone who you trust, but more importantly, they are putting a lot of trust in you. Don’t make them regret putting their name on your debt.

PAY BILLS ON TIME. You should have been doing this anyway. The most important thing that you can do for yourself is to pay all of your bills and make good on any loans. Don’t bounce checks. Don’t pay late. If your income is stable enough to do so, consider setting your bills up to be automatically paid out of your bank account each month. I personally have to do this to keep myself from forgetting due dates. It’s wonderful.

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