Fixing your credit after a divorce
A divorce wreaks havoc on a person's emotions and personal well-being, but it is the financial hardships of a divorce that sometimes take even longer to overcome. Even the most amicable of divorces can lead to payments being missed and dings ending up on both people's credit reports. But when the fallout from a divorce is at its worst, judgments, foreclosures, and bankruptcies can all come into play, and can all destroy the credit ratings of both people involved.
Divorce is one of the many scenarios that illustrate the basic unfairness of the credit reporting system. When a couple separates, the debts they have incurred as a partnership are divvied up among each party so that only one person is responsible for making the house payment, car payment, credit card payments, etc. The problem is that, even when a judge assigns the debts to each person, the creditors involved do not respect that fact the only one person is accountable for each debt.
When trying to collect a debt, creditors will try to hold both parties responsible. So, for example, even if a judge has declared that one party is wholly responsible for paying off a credit card balance, when payments start coming in late, the credit card company may start adding negative listings to both people's credit reports. It is not uncommon for someone who has gone through a divorce to suddenly start seeing negative marks appear on their credit reports for accounts that they are not responsible for and were not even aware were in poor standing.
When this starts happening, the credit scores of both parties can take a significant dive, but that is not the worst of it. In some cases, one party will completely give up on paying their debts and go so far as to declare bankruptcy which leads creditors to begin hounding the other party to repay all debts. As a result, the person who has worked hard to manage the debts they were supposed to be responsible for following the divorce, has seen their credit score crash through no fault of their own and may face losing their home or maybe having to file for bankruptcy as well because the debts of two people are simply too much to handle.
Work toward a new start by fixing your credit
Because of the effect it can have on your finances, putting effort into fixing your credit reports may be one of the best things you can do to help put a divorce behind you and start moving forward on the rest of your life.
Your credit score is supposed to be an accurate reflection of your credit worthiness but when negative items are wrongfully added to your credit reports after a divorce, lenders can get the wrong impression of you. You may be a responsible person who can be counted on to repay your debts, but the inaccurate items in your credit reports give lenders the impression that you are less than trustworthy. Your poor credit rating ends up being a link to unfortunate past events, and an obstacle to making the most of the future.
When this happens, the law gives you the right to dispute any items in your credit reports that you feel may be inaccurate, untimely, misleading, incomplete, ambiguous, unverifiable, biased or unclear. By effectively disputing and removing these questionable negative items, people have been able to significantly improve their credit scores and erase the negative effects a divorce had on their credit.