Divorce is bad enough but if it starts affecting your credit status you could find yourself having all sorts of problems, the best thing is to take a proactive approach and work out a plan to ensure that once divorced you don’t have to start again with your credit rating.

Divorce is an uncomfortable time and things can get forgotten with all the stress and anxiety involved, maybe you have maxed out your credit card and possibly forgot to pay a bill, mistakes like this could cost you a lot more than you bargained for. Firstly, I suggest that you acquire a credit report from the three main agencies, Experian, Equifax and TransUnion, this will give you a clear picture of exactly where you are at. You are able to obtain once a year a free credit report if you visit www.annualcreditreport.com.

Take a good look at the report and address the most urgent, maybe list all your accounts that are open, you could do this in a spreadsheet if software is available to you. List who the account is with, contact details and account numbers, include the account balance and minimum monthly payment.

During a divorce there are two types of credit accounts, the first is a secured account, something like a mortgage loan or car – basically any loan that is attached to an asset. The second is an unsecured account, mainly charge cards or credit cards, basically a loan with no asset secured on it.

If it’s a secured loan you can either let your spouse buy you out, or sell the asset privately so you can pay the loan off and clear your name from the asset. However, you can leave the loan in your name, although this is far riskier because if you are not the one out of the divorce who has to make the payments your credit rating is truly vulnerable. Most importantly if you name is kept on the loan make sure that your name is still on the title as you really don’t want to end up paying for something that is legally not yours.

If you have property in your divorce settlement it is important to seek advice from a mortgage professional as they will help you through and advise you on the best course of action.

If the loans are unsecured you need to move fast, it’s really important to know where you stand on the loan, if you are just a signer then you must remove your name immediately, if the account does not carry a balance make sure you close these immediately.

Do not think that a divorce decree counteracts any agreement you have with a creditor, it doesn’t matter if you spouse is ordered to pay by the judge, If payments are not made it will affect both your credit ratings, so make sure you eliminate joint accounts as quick as you can.

We hope these steps help you to keep your credit score intact, divorce is difficult enough as it is without finding yourself with bad credit rating.

Source: americanchronicle