The good news is that when it comes to your credit, you can always get a fresh start. While you may not be able to change the past, going forward if you are meticulous about paying your bills on time you can see significant improvement in your credit scores. Recent information tends to have the greatest impact, so make sure that you have open active accounts that are paid on time. If you don’t already have one, get a credit card in your own name, even if it’s a secured card.
Of course, you can’t improve your credit score without seeing the whole picture, it is a worthy investment to know your credit scores and monitor your progress.
In the short-term, if you have poor credit or no credit at all, what are the best ways to get a loan or cash to finance a needed car, a family lawyer or even daily expenses, which is common for people in the middle of a separation or divorce?
What type of financing you’ll get will depend in large part on your current credit score. If you don’t have a lot of credit, it may be easier to get a loan then if you have a lot of debt or very poor payment history. Some consumers find they are able to get a personal loan; others may turn to credit cards, even if they have a fairly high interest rate. Watch your mail; if you get an offer for a low rate balance transfer, you may want to take advantage of it. Another option that doesn’t require a credit check is a loan against a retirement account such as a 401(k). It is not ideal by any means, but it’s usually better than cashing in a retirement account early and paying taxes and penalties. Finally, you may be able to get a loan from family members or friends. These loans don’t appear in your credit reports, so that may be an advantage. But it’s best to put the details in writing so everyone’s clear on how and when this loan will be repaid.
What if you start hearing from debt collectors about debts your ex didn’t pay?
If the collector is trying to collect from you, you have the right to ask them to put it in writing. Once they do, if you don’t believe you owe the debt, or you don’t believe it’s correct, you have the right to request they verify the debt. Put your request in writing.
If the collector calls about a debt your ex owes, you don’t have to discuss it with them if you don’t want to. You can explain that you can’t be of help and asked them not to call you again. That generally should stop those phone calls. If it doesn’t, you can file a complaint with the Consumer Finance Protection Bureau.
For more information on divorce and finances, I encourage you to attend a Second Saturday workshop in your area. We recently started these in Annapolis.