When going through a divorce, fears about financial security are common and often with good reason. When an individual or his or her spouse moves out of a previously shared home, the financial repercussions can have a significant and immediate impact on one’s day-to-day life. This is often especially the case when an individual has been a stay-at-home parent or isn’t accustomed to handling the finances and paying bills or budgeting.
For individuals who are going through a split or who are recently divorced, it’s crucial to take steps to understand one’s current financial situation and to take steps to both protect and build one’s credit score.
Often spouses who have credit cards share joint accounts. Therefore, upon splitting up, it’s wise to take steps to pay off or have a spouse’s name removed as an authorized user and close the accounts. It’s then wise to request and to closely monitor one’s credit reports. Doing so ensures an individual can keep track of any mysterious or odd dings to a credit score and could help uncover any secret accounts that a soon-to-be ex-spouse opened in one’s name.
In addition to closing all joint accounts, it’s also wise to take steps to establish and build one’s own credit. Opening a new credit card account in one’s own name and making sure to pay off any accrued debt on a monthly basis can be beneficial. Also, in addition to making sure one is on time with all credit card payments, it’s also important to always pay other bills including the utilities and mortgage in a timely manner.
Source: The Huffington Post, “How to Improve Your Credit Score After Divorce,” Curtis Arnold, March 13, 2015