How to Re-establish Your Credit After a Divorce

To re-establish credit after a divorce, you need to get bank accounts and credit cards in your own name, have a regular income and pay all your bills on time.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• Credit Cards And Loans

1. Get a job, even a part-time one, if you are not employed. Make sure your income is reported. An under-the-table paycheck may seem great, but it will not help you establish credit.

2. Establish a residence, and don't move. Frequent moves make creditors nervous.

3. Cancel all joint credit cards from your marriage.

4. Apply for a credit card in your own name. If you are denied, get your credit report, and find out why you were denied.

5. Get information about debit cards if you are denied a credit card. Debit cards look like credit cards, except you pay money up front and then draw against this money when you charge purchases.

6. Make name changes. If you have changed your name because of the divorce, you should notify all of your creditors, financial institutions, and investment or pension accounts. Make sure your address information is current.

7. Open bank accounts in your own name if you do not have accounts set up. Open a checking and a savings account, even if you can put only a few dollars in the savings account.

8. Budget your money. Do not buy more than you can afford, and do not take out a loan unless you can pay it back.

9. Get a cosigner if you are turned down for a loan you need. Ask parents, family and close friends.

10. Make arrangements to consolidate your debts if they are more than you can handle. Check in your phone book for a consumer credit-counseling service that can assist you in doing this.

11. Talk to an attorney. Often creditors will agree to accept smaller payments when an attorney indicates you may have to file bankruptcy. Discuss bankruptcy with your attorney if you cannot handle your debts.

12. Pay your bills on time.

Tips & Warnings

• Do everything you can to make yourself look good to creditors. Don't bounce checks or send late payments.
• List employers and creditors you have good relationships with as references.
• Be wary of companies that offer to help re-establish credit for a fee. Many of them are scams or offer to do things you can do on your own for free.

[rosie96778]

on 9/20/2008 good tips thanks