Divorce often presents individuals with an opportunity to improve their lives. If you are not happy with your current credit score, you may want to use the end of your marriage as a reason to make some financial changes.
With a good credit score, you may have an easier time securing a mortgage, car loan or another type of financing. According to Equifax, a major consumer credit reporting agency, any personal credit score above 670 is good. Here are three ways to rebuild credit after your divorce.
1. Address joint debt during your divorce
If you divorce in Minnesota, you should receive an equitable share of everything you and your spouse own. You may also be stuck with an equitable share of your marital debt.
To ensure you have as much control as possible over your credit future, put all debt for which you are responsible in your own name. Likewise, the debt your ex-spouse must pay should be exclusively in his or her name.
2. Order your credit report
You have a right to receive a free copy of your credit report every year. After requesting your report, review it for accuracy. Resolving errors may cause your credit score to rise quickly.
3. Establish a budget
Acclimating to your post-divorce world may require making some financial sacrifices. By establishing a budget, you know precisely how much you may spend without going into the red. That is, sticking to a budget may keep you from acquiring additional debt.
Because too much debt may encourage your credit score to plummet, following a realistic budget may be your best bet for improving your personal creditworthiness.
