Going through divorce and property division for many in Illinois is a trying time. Often individuals feel like they have to start their financial lives over and in some cases that can be the reality. Sometimes individuals have to recover from the financial mistakes of shared accounts or individuals may have to build credit for the first time.
In order to build or rebuild your credit after divorce, you first have to know your current credit score. To identify your status, check your credit reports from the three credit report agencies: TransUnion, Experian and Equifax. You are entitled to receive a free copy of your credit report from each agency once a year.
After you receive your credit report, review the report and look for indications of late payments and collection efforts on individual accounts and accounts that were held jointly. Being aware of red flags like late payments and collection efforts will inform you on your ability to qualify for credit in the future.
Next, you should make sure all the information on the credit report is correct. Review the credit history, employment history and other personal information that appears on the report. If you find any mistakes, correct them. All three of the credit reporting agencies have online forms that allow you to dispute an error.
If you still have any joint accounts or joint financial obligations with your former partner, try to end or separate those obligations as soon as possible. The failure of a former partner to pay a joint mortgage or joint credit card account will affect your credit. Remember, you are liable for any unpaid bills or debts on shared accounts.
Finally, the best way to build or rebuild credit is to pay account balances in a timely way. More than one-third of your credit score is based on your payment history.
Source: foxbusiness.com, “Square one: How to build credit after divorce,” Lynnette Khalfani-Cox, Jan. 25, 2012