This is a guest post written by a staff member at Top Ten Reviews, meant to help newly divorced men and women repair and improve their credit.
Newly Divorced. Now, How Do I Repair My Credit? provided by Top Ten Reviews
Many people find that their credit score takes a hit during and after a divorce. Fortunately, this damage doesn’t have to last long. Being proactive in monitoring your credit, judiciously applying for new credit and making sure that your former spouse fulfills his or her obligation to repay joint debt can help repair your credit and restore your financial health.
1. Review Your Divorce Decree
Your divorce decree should contain details about any debts held by both you and your former spouse. The decree will indicate who is responsible for paying these debts and may even include a timeline for repayment. If you are unsure as to whether you are responsible for paying debts incurred during your marriage, ask your lawyer for guidance.
2. Monitor Your Credit Reports
Contact all three major credit reporting agencies, Experian, Equifax and TransUnion, and request your credit reports. While federal law requires credit bureaus to give you one free credit report each year upon request, you should check your credit more often. Review each report carefully to make sure that new accounts have not been opened in your name and that your current accounts are reported properly. If your credit is damaged due to non-payment by your spouse, you can compose a short statement explaining the problem. The credit bureaus must attach this note to your reports.
3. Monitor Court-Ordered Debt Repayment
Don’t assume that your ex is paying off debts as agreed in your divorce settlement. Contact creditors to check on repayment status and check your credit reports for late payment notations. If you find that your ex is not making timely payments, contact your lawyer. You can bring the problem to the attention of a judge who can order your ex to pay up.
4. Contact Creditors
Contact all creditors and ask them to remove your ex as a joint account holder or authorized user. Some may refuse to do this if there is a balance on a jointly-held account, but creditors should be willing to remove your ex’s name if he or she was just an authorized user. If you are an authorized user on your ex’s accounts, contact the creditors and ask them to take your name off the accounts.
5. Pay Off Old Debts
Pay off the debts that you are responsible for, particularly accounts that were turned over to collection agencies. In addition, some credit scoring models now ignore collection accounts where the debt has been paid-off. This can result in an increased credit score.
6. Establish New Accounts in Your Name
If most or all of your credit accounts were in the name of both you and your spouse, it’s time to establish your own credit history. Begin by opening a few lines of credit, such as by applying for a store or bank credit card or even taking out a small personal loan. Keeping your balances low and making your payments on time will build your credit score.
7. Be Patient
Negative information usually remains on your credit reports for seven to ten years. If your former spouse’s irresponsibility caused your credit to take a hit, sit tight. Your credit score is affected more by recent reports than by old information. Eventually, the credit bureaus stop reporting the negative information.
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