Let’s start with the Good News! If your credit score is lower than you would like, which is frequently true when going through a divorce, don’t despair. Follow these five quick tips and chances are you can improve it!
1. Credit counselors suggest it is best to use less than 30 percent of your eligible credit. First, look at your numbers to see if you are at, or below, 30 percent.
2. If you are in the midst of a divorce, be sure to check with your financial and legal advisors before paying down debt. You don’t want to unnecessarily assume the entire financial obligation for shared debt.
3. Do not open several new accounts at one time, as this can red flag your credit. It lowers the age of your accounts and creditors might wonder about your long-term intentions to take on more debt.
4. Leave your unused accounts open. Closing them will not have an immediate impact on your score, and you might need additional credit in the near future. These accounts can add to your overall available credit and increase your eligible-credit to used-credit ratio. Remember it is advised this ratio be 30 percent or less.
5. Re-establish your credit. If you are experiencing trouble with a creditor, contact them and explain your situation. Tell them that you would like to work with them to resolve the status of your account. Creditors are usually understanding and really do want to help you.
Remember- if you have started the divorce process, your temporary orders may limit what you can and cannot do with joint accounts. Don’t be discouraged though; just check with your legal and financial professionals. Be patient! It takes time to make changes and more time for the credit agencies to reflect improvement. Hang in there--it'll be worth it!