When you are going through a divorce, your finances can get a bit confusing. ‘What money is mine’? ‘What do I have to pay’? ‘What do I do next’?
When I was getting divorced, I never really considered the ‘me’ part of the equation. I was worried about the joint accounts, joint credit, and joint kids, but I didn’t take any time to consider what I was doing to myself financially. I ended up making a BUNCH of mistakes, which I sincerely hope you can avoid. Most of my mistakes revolved around the management of credit, but I also made mistakes regarding WHEN to get credit.
Let me give you a couple of key things to think about:
1) A fairly hefty part of your credit scores, about 10%, revolves around HOW LONG you have had your accounts open. A new account has less power than an older account.
2) When you get divorced, you may not be able to keep some of your credit cards, and you may have to sell or give up your stake in cars, houses, or other assets.
Therein lies the dilemma. If you end up getting rid of a credit card, as an example, that you have had for 5 years, you may take a hit on your credit scores. Your house that you have been paying on for 10 years may go away. In other words, the AGE of your credit may be reduced.
There are a few simple things you can do to fix that. First, call your creditors and ask them if they will issue you a new card. This will start the clock over before you have to give up your old cards. You will still take a hit, but a six month head start can really help.
Second, go ahead and take care of yourself. If you will be losing your car, get another one. You can rent or buy a new house. Just remember that you will be qualifying WITHOUT your spouses’ income, so make sure you overextend.
The simple point here is that you can open credit for yourself AT ANY TIME, as long as you qualify for it. That can happen before your divorce, while happily married, or any time after the divorce. You have to be able to make payments, but if you qualify the credit can be yours.
A final note: If you have filed for divorce, or even separation, and you use your spouses’ information on the application as a co-borrower, you are likely to get in trouble with the courts. You aren’t sharing that money any more, so use what you make and don’t risk the pusishment that may come your way.
If you are going through a divorce, you really need to read my FREE e-Book ‘The Top 10 Ways To Save Your Credit During Divorce’. This book will guide you through some things you need to do to protect yourself as you go through this tough time. Just click the link above to get your free copy.
