15 New Freebies this Week.
Life is different after a divorce, you have to go through a lot of things emotionally. You have to face a lot of different things and things change drastically. It is considered as one of the toughest time of life in which you have to take emotional decisions and so does with all these issues, there is a chance that you overlook some issues that can cause difficulties for you in the future. When you face a divorce, credit is the last thing that comes to the mind and if you are the one who has not done any financial decisions then this could be more difficult.
Credit is important and you should take care of it because it can help you in many ways. If you do not pay attention on credit then it could be much difficult to start a new life. If you have a bad credit, then it would be much more difficult to rebuild your credit. If you are facing issues in rebuilding your credit, then you can use credit repair services. There are a number of different companies that you can check.
If you want to repair your credit by yourself, then the tips below can help you. So let’s start,
Open a New Credit Card
Another simple way of improving your credit is to buy a new credit card. In this case, you will have to strictly follow two rules, if you want to make positive changes otherwise it could be opposite. The first thing you need to do is to pay off your credit card bill on time and secondly you should pay your balance in the same month and should not make any late payments. If you can follow these two steps then you can improve your credit score because it would lower your credit utilization ratio and as I have explained that will increase your score.
If you have more amount available as a credit limit then you can open a 0% APR balance transfer card and if you have this card than you can pay off your debt without interest for a number of months.
Having a credit card at your name, enables to establish a credit history at your name and the longer history you have, the higher are the chances of getting an improvement in your score.
Review your Credit Report
If you have a combined account with your spouse and after the divorce, if one of the spouse if making late payments then this would make a negative impact on the credit report of both the persons. Even if you are not the person who is paying the late payments it could still have a negative impact on your credit report. This could have long lasting effects because the negative marks stay on your report for 7 years and your score also decreases gradually.
If you are facing such an issue then review your report very carefully and try to locate any issues if there are any in the report. You should also tell your bank about the divorce, so that they could send a dispute letter and you could avoid the negative mark. You can check your credit report once a year for free and if you want to do this for free and more than one time then you should check your report once in a 4 months from one bureau. By this you could check the free report from each bureau.
Set Bills to Auto-pay
This is an important thing to do if you want your credit score to improve. If you pay one or two payments late, then this could make a negative impact on your credit report and can decrease your score. So this is one of the important thing to do if you do not want to take any risk because sometime you can accidentally forget your payment.
So the best way to avoid such type of situation is that you should set auto payments for every bill that you have to pay regularly and also pay those bills on time that come once after a long time.
Pay Debt
Debt has a lot of effect on your credit score and if you have a lot of debt to pay then your credit score will decrease day by day. One of my friend faced this situation, when after the divorce, she has to pay a lot of money and that gradually decreased her credit score. She paid almost $100,000 in debt in a very short time by following some simple tips.
She promised with herself that she would not buy anything extra and only buy those things that are very necessary. She first shifted to a smaller house, stopped shopping for new items, unsubscribe for many useless subscriptions, cut down on cable, cut down gym membership and tried to negotiate on bills that she had to pay. She saved money from all these categories and paid for debt.
If you pay your credit card debt first, then it will decrease your credit utilization ratio. This will also increase your credit score because if you are using less of your credit limit then you this will improve your score gradually. If your credit utilization ratio is less than 30% then you would have a higher chance to improve credit. For example if you have a credit limit of $20,000 then you should keep your balance at $6,000 because this will have a positive impact on your credit score.
Conclusion
So these are some of the methods through which you can improve your credit score. Credit is not an easy thing to understand and you have to be very careful sometimes. Having a good credit score can help you a lot in many ways, one of the biggest benefit is that you can get a much lower interest rate on the debt you take. So make sure, you keep a good check on your credit score and history. Do comment in the section below and let us know if you have any queries regarding the article because we would love to hear from you.
