Sharing finances can unintentionally bind your credit score to your spouse in a way. If you choose to divorce, it could take time to establish your own credit again.
Careful monitoring of your finances can help you avoid missteps that might further complicate your situation. Implementing the right strategies can help you take back control of your credit.
Even though you have begun the process of divorce, the behavior of your former spouse might still impact your financial health. For example, if your soon-to-be-ex runs up significant debt on a joint account, your credit score might take a hit. Preventing this type of situation from happening requires immediate action at the time of divorce. Some things you can do include the following:
- Freeze joint assets
- Document any expenditures in joint accounts
- Open a personal bank account
- Negotiate payment of shared debts
- Pay your bills on time
You will want a good credit score so you can have leverage to secure lending. Because building credit takes time, you will want to begin immediately. According to CNBC, focus on lowering your credit utilization. Live conservatively while you adjust to the financial changes brought on by a divorce. If you have debts you struggle to pay, work with lenders to modify repayment terms.
When used responsibly, credit cards can help you build rapport. You can demonstrate your ability to make payments in full and on time. Contrary to what you might have heard, your divorce does not have to be the reason you suffer financially. Your proactive approach to safeguarding your finances can help you protect and increase the money you still have. Strengthening your credit score is just the beginning.