When you’re going through a divorce, it can be incredibly difficult to think about your financial health. But, as with any major life event, a divorce can have an enormous impact on your financ-es in both the short and long term.
Proactively monitoring and protecting your credit after you dissolve your marriage can make the divorce process substantially less stressful and mitigate the potential for long-term financial chal-lenges. To that end, it’s important to consider a few simple tips to ensure that you have the finan-cial stability to live independently post-divorce.
Pay your bills on time
A divorce can cause a lot of distractions, especially if it’s contentious and takes up a considerable amount of time. Thus, many people going through this process find themselves struggling to stay up to date on their bills. Making timely payments is one of the most important and most basic steps you can take to maintain financial stability following a divorce.
Each time one of your creditors or service providers reports a late bill payment, your credit score will take a hit. After just a few late payments, you could be in a situation in which you have trouble securing a loan or credit when you need it most.
If your creditors send any of your outstanding bills to collections, the damage done to your cred-it could be extremely difficult to recover from. To that end, it’s best to work with your creditors to set up a payment plan prior to having your accounts sent to a collections agency.
Don’t apply for too many lines of credit
Depending on how your divorce proceedings go, you may need to make several substantial pur-chases in the coming weeks and months. Whether you are purchasing household goods, a new vehicle or a home, you must plan how these purchases will affect your credit rating prior to mak-ing them.
Making too many inquiries into your credit report will reflect poorly on your credit score. Even if you are approved for every loan or credit card for which you apply, making multiple credit in-quiries within a period of several months will still adversely affect how future creditors see you. The only exception is when you are applying for a mortgage or auto loan, in which case you can make multiple inquiries within a 30-day period to shop around for the best rate.
Keep a low balance
You should maintain a balance that is below 35 percent of your total credit limit on all your active credit cards. Holding a balance over this limit is guaranteed to adversely affect your score and make it more difficult to secure a loan or credit in the future.
Work with legal counsel
You may be entitled to certain forms of financial support from your former spouse that can make the process of recovering from a divorce much more manageable. It is recommended that you consult a knowledgeable divorce attorney prior to making any major financial or legal decisions.
For further guidance on this and other issues related to your divorce, speak with a dedicated New Brunswick family law attorney at the Law Office of Steven M. Cytryn.
