Rebuilding credit after divorce

Legal credit rights after divorce

Divorce is a very common cause of financial distress. It's hard to split up your accounts while trying to keep yourself together. If you start working on your credit now, you should be able to finance a home in a year or two.

Your first step should be to stop any new damages to your credit reports from TransUnion, Equifax and Experian. Make sure that all joint and co-signed accounts from your marriage have been closed or refinanced. You don't need your former spouse's late payments causing any new harm to your credit. A court decree alone will not stop a joint account from being recorded on each party's credit report. Order your credit reports and look at your financial status carefully. Are there late payments, high balance debts or inaccuracies on your credit report?

Highlight each problem area and make a detailed plan for improvement. Dispute the inaccuracies you find with the creditors or credit reporting agencies. Sign up for automatic bill payment through your bank. Make a plan for reducing your debts to below 50% of their limits. If you have a negative record on your credit report such as a bankruptcy, make sure it is being accurately recorded and know the expiration date.

When you are back on track and ready to buy a home, talk to a HUD approved housing counselor in your area. HUD counselors know your rights and will help you get credit under the best possible terms.