Building your credit before, during and after divorce


In this article from Bankrate, Marcie Geffner offers some valuable advice on how a divorce can affect your credit, and how you can take steps to build your credit history.

Divorce can be hard on your personal finances, particularly if you haven’t established credit in your own name.

If you have no credit, or a thin credit file, getting credit when you need it, perhaps to rent a car, buy an airline ticket or shop online, could be challenging.

This happens more often to older women who weren’t the primary income earners in their household while they were married, says Ronit Rogoszinski, a wealth adviser at Arch Financial Group in New York’s Long Island.

“A lot of women just never got the Visa or MasterCard or American Express,” Rogoszinski says.

The best way to fix the problem is to avoid it by establishing separate credit while your marriage is still happy, says Rod Griffin, director of public education at the credit bureau Experian.

“Ideally, you maintain an individual account or 2 in your own name in the event that something unexpected happens,” Griffin says.

That could be a divorce or some other financial calamity.

A small purchase every few months typically is enough to keep an account open and active.

Another approach is to establish separate credit during the divorce, using the primary wage-earner’s income and credit history to qualify, says Lili Vasileff, founder of Divorce and Money Matters, a divorce financial planning firm in Greenwich, Connecticut.

The 1st step is to obtain your own credit report. This report can help you find out credit that’s open in your name, debts you don’t know about (if any), and credit reporting errors that can be corrected.

It’s also a good idea to find what points, airline miles and other perks are associated with various accounts. Vasileff says these are marital assets and can be subject to negotiation during the divorce.

The next step is to open a major credit card in your own name “as if everything is normal,” Vasileff says. Then get a car loan, open a bank account, sign a rental agreement or take other actions to establish separate personal finances.

“These little, small steps are very key,” Vasileff says. “Because then, by the time you’re divorced, you’re up and running and have things you can point to.”

[Read the full article]

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