Re-Building Your Credit After Divorce

A divorce can be a very stressful event for anyone. There are many complicating factors involved, especially when it comes to your finances. In addition, a divorce can have negative aspects when it comes to your credit. Although your credit can and will be affected, there are ways that you can bring it up and rebuild it.

Know Your Score

To make progress on your credit, you should start by knowing your score. Knowing this will help you determine how much work will be involved and how many adjustments you will need to make. There are various ways that you can check your credit score. A standard method is to request a copy of your credit report. The three prominent Canadian credit companies include Equifax, Experian, and TransUnion. If you look at your credit report online, you can easily find your score. Another method is getting it from your bank. Depending on your bank, they may have a credit program where you can sign up for an account and keep track of your score.

Cutting Off Financial Ties

After your divorce is finalized, cutting off any aspects still tying you down financially will be essential. This can be a challenging and time-consuming process, especially after your divorce process has finished. However, dealing with these finances reasonably will help you rebuild your credit again and avoid any other financial problems. Start with cutting off any joint accounts that you have. Of course, if possible, you will need to discuss this with your ex and create a reasonable plan to get these accounts closed. After this, it will be essential to examine your debts together. Removing them from your current debts is very crucial since you only want to be making one payment. If this is skipped, you could find yourself ‘missing payments’, which will lower your credit even more.

Establish Your Credit History

After being married for some years, you have built credit with your spouse. After a divorce, knowing how to independently develop your credit history can be challenging. Signing up for a secured card is one of the best starting stones to establishing your credit. Although it can be challenging to be approved for other cards, you can prove your financial credit responsibility with a secured card. You typically need to make a monthly payment with such cards. When you thoroughly continue making payments on time, you ultimately increase your credit by showing you can handle your finances responsibly. If you are curious about what card will be right for you, make sure you do some research.

Develop a Plan

An overall credit plan will enable you to reassemble your credit. This plan can have all sorts of factors, including a payment schedule. Making payments on time will be one of the most crucial factors when trying to increase your credit. Make a list of all your monthly payments and their deadline dates. Try to make every payment at least 5-7 days before the due date. This will ensure that your payment goes through without delays, ensuring there is no way for a late payment to occur. Another aspect to include in your plan is keeping track of your score. Although it is essential to know what it is at the beginning of this process, it is vital to continue monitoring it. This will help you understand how much progress you have made and what changes you need to make. The most important aspect is that your plan includes factors that will help and motivate you to continue working on your credit and progress.

Be Patient

Starting anything new will take time to get the hang-up. This includes starting to build your credit. Getting used to any new financial practices will take time to adjust to, which is perfectly normal. Remembering to remain patient is vital, so that you do not give up. There are thousands of people who are in a similar situation as you right now. Accepting that you are not alone will assist you in remaining calm and patient about your case. Speaking with a friend who has been through this situation can help you gain tips on coping and continuing through your financial journey.

Upon reviewing the various ways to rebuild your credit, it is evident that it is possible. When you are financially responsible and put this into effect, you will be able to gain a high credit in a matter of time.

Sources

-Boitnott, John (2022). 7 Strategies to Rebuild Your Credit After Getting Divorced. Debt.Com. Retrieved from https://www.debt.com/news/rebuild-credit-after-divorce/

-Equifax (2022). How to Rebuild Your Credit After Divorce. Retreived from https://www.equifax.com/personal/education/credit-score/how-to-rebuild-credit-after-divorce/?cmpid=Social-facebook_&fbclid=IwAR2aHEGWnIoQtvjeTzXsG0vqs6ijwRkgUo4g1295cwanpOMtnE5J7N7iK_U

-Suknanan, Jasmin (2022). Did Your Credit Score Take a Hit After You Got a Divorce? Here’s How You Can Re-build It. Select. Retrieved from https://www.cnbc.com/select/rebuild-credit-score-after-divorce/