5 Ways to Rebuild Your Credit After Divorce
Divorce can be emotionally and financially devastating. In addition to the emotional stress of ending a marriage, you also have to deal with the financial repercussions. One of the biggest financial challenges you may face after a divorce is rebuilding your credit.
If you were relying on your spouse’s good credit to get by, you may find yourself with a lower credit score after divorce.
This can make it difficult to qualify for loans or lines of credit and can lead to higher interest rates if you are approved for financing.
Fortunately, there are some things you can do to rebuild your credit after divorce.
Here are five tips to repair your credit:
Get a copy of your credit report.
The first step in rebuilding your credit is to get a copy of your credit report. You are entitled to one free credit report per year from each of the three major credit reporting agencies: Equifax, Experian, and TransUnion.
You can get your free credit reports by visiting annualcreditreport.com. Once you have your report, review it carefully to make sure there are no errors. If you find any errors, dispute them with the credit bureau right away.
Pay your bills on time.
One of the biggest factors in your credit score is your payment history. Late payments can damage your score, so it’s important to make sure you pay all of your bills on time.
If you’re having trouble keeping up with your bills, try setting up auto pay. That way, you can ensure that your bills are paid on time each month without having to think about it.
Use a credit card wisely.
If you don’t have any credit cards, now may be the time to get one. But beware: if you use your credit card irresponsibly, you could end up doing more harm than good.
To use your credit card wisely, charge only what you can afford to pay off in full each month. This will help you avoid interest charges and keep your balances low, which is good for your credit score.
Keep your balances low.
Speaking of keeping your balances low, another important factor in your credit score is your credit utilization ratio. This is the percentage of your credit limit that you’re using at any given time.
Ideally, you should keep your credit utilization ratio below 30%. So, if your credit limit is $1,000, you shouldn’t carry a balance of more than $300.
Don’t close old accounts.
If you have credit cards that you no longer use, you may be tempted to close the account to avoid paying the annual fee. But closing an account can actually hurt your credit score by lowering your credit utilization ratio.
It’s better to keep the account open and use it sparingly (charging only what you can afford to pay off in full each month). This will help keep your credit utilization ratio low and improve your credit score.
Rebuilding your credit after divorce may take some time, but it’s definitely possible. By following these tips, you can get your credit score back on track.
Masters Credit Consultants is here to help you get your credit in a better place
Based on signing up for your FREE credit consultation, Masters Credit Consultants will be able to guide and assist with finding out just what it takes for each individual’s needs so they can achieve their goals of having an excellent history when looking into mortgages or other financial transactions such as renting apartments!