The period after a divorce isn’t just a time for emotional recovery – it’s a time for financial recovery, too.

5 minute read

Getting a divorce is fraught with stress and challenges. In many ways, it feels like you’re starting over from scratch. One of the biggest challenges is rebuilding your credit.

Maybe you didn’t have any credit in your name while you were married. Or perhaps both of you had credit but also ended up with a lot of debt.

That could lower your credit score and limit your access to future credit. In fact, a Debt.com survey found that 38 percent of people say divorce hurt their credit by at least 50 points.

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1. Know the score

Know the score

Before you can achieve any goal, you first need to establish where you’re starting from, and rebuilding your credit is no different. So the first step toward getting your credit in shape post-divorce is to find out what your current credit score is. This helps you determine how far you have to go to earn a number that opens up financial opportunities.

During this evaluation process, study why you have your current score. You’ll need a copy of your credit report from each of the three main reporting agencies, Experian, TransUnion, and Equifax. It’s fast and easy to request these.

Your credit report will show you what debts you may be responsible for, including any joint accounts opened during the marriage you weren’t aware of. Or, you can spot inaccuracies so you can start addressing them.

2. Cut the cord with your ex financially

Cut the cord with your ex financially

Most separation of financial responsibilities should have occurred during divorce. However, credit reports may not reflect all those changes. They may show you joint accounts you didn’t know about and must now address.

The initial impact could mean a further drop in your credit score due to a smaller amount of available credit. But, this is just part of the process of cutting the cord with your ex and establishing your own financial history. Plus, once you establish your own credit, that score will start to go up again.

For every joint account still open, you’ll most likely have to write a letter to the creditor. In the letter, request account closure or name removal. Then provide proof of the credit closures to each credit reporting agency.

3. Develop a credit rebuilding plan

Develop a credit rebuilding plan

Now it’s time to create a step-by-step plan to work through over time. Not only will this plan be a roadmap for financial recovery, but you’ll be able to use it as a motivating tool as you make slow and steady progress along the way.

A spreadsheet like Excel or Google Sheets provides a way for you to develop a timeline of actions you’ll take with potential achievement dates.

You can also provide links to research where you have further direction on how to address a certain tactic. Plus, you can add notes related to follow-up or make further changes as you try other tactics.

4. Establish your own accounts

Establish your own accounts

Open your own checking and savings account at a local or online bank. You may want to consider a credit union that offers competitive interest rates and other financial products. These additional products could help you when you are ready to apply for new credit.

As a woman, you may want to ensure that you’ve first taken care of any legal changes to return to your maiden name before opening these accounts. That also means having the right photo identification to verify that new name you want to use.

5. Focus on paying bills on-time

Focus on paying bills on time

Before you look at accessing any new credit, start with smaller actions that can have a big positive impact. One of these actions is to pay your existing bills on time, every month. These bills might include a mortgage or rent payment, utility bills, cell phone bill, and any loan repayments for things like student debt, credit cards, or vehicle loans.

First, doing so will start to show credit reporting agencies a track record of financial responsibility. Second, paying bills on time will help you avoid late fees so you can use that money for making larger payments on installment loans or for establishing savings.

One of the best ways to ensure on-time payments is to establish automatic bill pay and set it for a few days before the actual due date. If you are struggling to make on-time payments because all your bills come due at once, ask some of your creditors if they can adjust the due dates so you spread out these financial obligations.

6. Work on your budget

Work on your budget

Before applying for credit that can eventually raise your credit score, you want to make sure your new financial house is in order. That means doing an audit of your financial situation and developing a monthly budget.

Take an inventory of your new income and expenses as a single person, accounting for alimony and child support payments (as income or an expense, depending on which spouse receives or covers these). Include all sources of income as well as all costs, including bills, groceries, repairs, insurance, and other regular expenses.

Knowing this will help guide your choice when it comes to applying for credit and just how much you can use that credit each month without falling into the overspending trap.

Plus, when you see how much money you have leftover each month by staying on a budget, you can start to add in other financial strategies beyond rebuilding credit like savings and retirement.

7. Leverage credit options for low credit score candidates

Leverage credit options for low credit score candidates

To rebuild your credit, you’ll need to start with credit products available to those with bad or low credit scores. Those choices include a secured credit card.

This is where that budget and establishing some reserve money each money will help. A secured credit card requires you provide a deposit amount in the secured credit card account before you can start using the credit card.

The limited borrowing power enables you to safely cover repayment and start to establish your credit worthiness again.

8. Be patient

Be patient

No matter what your background, rebuilding credit takes time and involves consistent and responsible decisions on how to use money and credit. Celebrate each increase in your credit and relish the financial freedom and awareness you are creating for yourself.

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About the Author

John Boitnott

John Boitnott

I am a tech writer and journalist for more than 20 years who contributes to several respected online publications including BusinessInsider, Inc., and Entrepreneur. In addition to journalism, writing about social good companies and in-depth research, I’m also active in my community and enjoy metaphysical book reading groups, as well as hiking on the amazing trails of the San Francisco Bay Area.

Published by Debt.com, LLC