How You Can Protect Your Credit During a Divorce?

ElitePersonalFinance
Last Update: February 12, 2021 Credit Report

There is no unpleasant ordeal as a divorce in the late ’50s. The spouse may decide to quit a relationship any time they feel the relationship is up to no good. Divorcing at this age comes with a lot of challenges. You have got to come to terms with the life of being single again, or you may also decide to venture into another dating journey. But when all is said and done, critical issues arise that call for one’s due diligence to tackle them, especially on finances. Just like in the boxing game, when given a knockout, all is not lost. You do not remain on the ground. You have got to stand up and motivate yourself.

Dealing with Emotional Instability Does Not Mean Revenge

During these moments, you are prone to emotional instabilities, and hence your credit is endangered too. Due to elation, you may feel ruining the other’s credit is formidable punishment. That is not going to help at all. There have been several cases where clients come to lament their ruined credit while they were in the process of finalizing their divorce. For instance, the husband may fail to honor an agreement to settle a said amount to designated banks. This ruins the wife’s credit. The repercussions are to lose the chances of getting mortgages, good terms on credit cards, auto loans, and lack of establishment of security deposits. To eliminate these unfortunate occurrences, this article will focus on several ways through which you can protect your credit during a divorce.

Update Your Address Immediately!

The moment you move out of your marital home after a divorce, it is advisable for you to change your credit card address. The creditors are the most second that you should notify about your divorce. Submit your new address card to the post office. If the post office offers online services, update your address and change your login details, if any. This is in case you had shared these details while you were both married. Doing this safeguards your bills and credit card statements, and the financial statements are addressed to your new residence. Missing the payments on a credit account is the final blow that should get you off-guard after divorce. Maybe your ex-husband or wife got a mail about the same but did not care to let you know. Changing the addresses nullifies the chances of your ex hitting back by hiding some of your important details.

Close All Your Accounts

There have been cases reported where couples exploit each other through joint accounts. In one of the cases, the wife argued that the husband was asking for more loans via the joint account connected to their individual personal accounts. The husband could fail to pay on time, and cash was always deducted from the connected accounts. The wife fell victim because she failed to take precautions to dissolve the joint accounts. The demerit with the joint account is that you are both responsible for the debts. Both of you have unlimited liabilities of the joint account. The credit expert advises that it is noble to terminate the joint account at the earliest stage of the divorcing process. Since the report’s activities to the credit bureau with your names appended, this will solely affect both parties’ credit score. To avoid harming your credit score for life, make a diligent move by ensuring that all the joint accounts are closed and the respective banks are officially notified.

Notify Your Creditors about Closed Accounts

The financial experts advise that it is vital for you to write an official letter to the creditors notifying them of your divorce and the closed accounts. Also, ask for all the current account statements. Tell them that you are no longer attached to the closed account, and you won’t be liable for the accumulated debts after the stated dates. They should put those accounts in an inactive mode to safeguard your credit card. Also, tell them to send this information to your credit card company. If you agree with your ex that either you can retain the account, then ensure you remove all the other person’s details in the account details. This curbs the risk of accumulation of unauthorized debts. The revoking should also be done via certified mail for security reasons.

Avoid Fighting for The Rights of The Matrimonial Home

This will positively help most women. They are more prone to the emotional attachment to the homes where they bore and raised their kids than it is for men. It is also influenced by other factors such as the location of the houses. The homes may be located in rapidly growing areas, where the home’s value appreciates day and night. The house may be in debt and mortgage loans that will thwart plans to sell the home in the future and consequently harm your credit. You may not even be able to pay for the rest dues of the house. The best way to avoid these drawbacks is by refraining from the fight to retain the home. Just move on, convinced you would afford a better home with less or no liabilities.

Create a Post Divorce Reduced Budget

Mostly when together as a couple, there are chances of double income. The husband and wife bring home some cash, either daily or monthly. This avails surplus fee for all your basic needs and luxuries. After divorce, the scenario changes. You now move from a double income home into a single income home. You need to strategic on obligations you can handle without straining your credit score. Your housing costs should be taken into consideration. You must prepare to make tough decisions alone, fight so many battles alone and also celebrate victories on your own. Involve a financial adviser for you to be enlightened on how to go about any major financial struggle. You should regulate your budget to fit the mortgage payments, maintenance, and insurance expenses. If you find yourself almost going beyond your limit, you can cut on the cell phone premium plans and other luxuries that are not basic. Failing to monitor your credit card and auto payments, as well as personal loans, can drain your credit and harm your credit score. So, after the divorce, settle down to the drawing table and re-write your divorce budget.

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