Whether you have been divorced or still going through a divorce, you should know that your ability to get credit and your creditor score can significantly affect your life after divorce. Your creditor score has a say in whether or not you qualify for a new credit card, home loan, or car loan. To protect your credit score and secure your financial future, you should consult with experts from London, Kentucky law office and a financial advisor. Also, taking the following steps can help:
Check Your Credit Report
During the divorce process, examine each loan item or credit card on your report. Check for credit card balances that need to be paid as your divorce is ongoing. Address credit accounts that you cannot close right away in the divorce decree, such as a mortgage or a car loan. Ensure the decree includes provisions that require the spouse who is taking the assets to sell if they cannot refinance the note.
Pay Your Debt on Time
Keep in mind that late payments on credit accounts can impact your credit score. This is possible on any account you are listed either as an authorized user or a borrower. So, remove yourself from these accounts and run a check your credit report to confirm the removal.
Build Credit in Your Name
Have you been depending financially on your spouse? If so, it’s time to apply for credit cards in your name before you finalize the divorce. Without an income after the divorce, it can be hard for you to qualify for credit cards.
Ensure Your Settlement Includes Paying Off Debt
When credit card companies collect a debt, they look for the debtor and don’t think about a divorce decree. Thus, a credit card that is in your name must be yours to pay. Therefore, you want your divorce settlement to include paying off all your debt in full. If not, you have to take on a debt or structure a settlement where you get other assets for taking on the debt.
Establish an Income Stream
Are you looking to buy a house or vehicle or refinance a mortgage? If so, you may want to structure the divorce settlement so you can get an income stream from your ex through contractual spousal support for a certain period. When you qualify for a loan or credit, alimony counts as income.
As you plan your life after divorce, it’s important to pay attention to your credit score. Speak with your family attorney on how you can protect your credit and consult with a financial planner to establish a long-term plan.