Rebuilding and Establishing Credit After Divorce

Now is the time to start paying attention to your credit standing, and if you have not already done so you must establish credit in your own name. Having a good credit score makes it much easier to secure a loan for a car or a mortgage on a home. Credit scores are often used in rental agreements, insurance quotes, utility start up costs, and even job applications.

Review your credit report as early as possible in the divorce process. This is important step to review your credit report making sure everything is accurate and you understand what are your own credit accounts and those of your spouse. The easiest way is to get your report from all three credit bureaus is by going to According to the Fair Credit Reporting Act you are entitled to one free credit report per year, and one free credit report if you are searching for a job.
  1. Make any necessary corrections to your credit report and wait a month or two before ordering a new copy to verify it has been updated correctly.
  2. Create a conservative budget allocating for court mandated child support or spousal maintenance.
  3. Change back to your maiden name if applicable. Changing your name does not erase your married credit history, but you need to have credit in your own name if all your previous credit was established with your husband. 
  4. Cancel all credit accounts that are jointly held, safeguarding your credit record in case your ex tries to use them. It is important to remember that even though you have cancelled a credit card the debt belongs to both of you until there is a zero balance. If you have changed your name make sure and change your name on the credit cards to the name you are now using.
  5. Open a bank account in your name and begin a relationship with your banking institution
  6. Apply for a new credit card in your maiden name (if applicable) if you have changed it back. Check with your bank to see if they offer a credit card through their institution. You can also get a credit card through a department store.T he sooner you establish credit in your own name the faster you can begin rebuilding your credit.
  7. Only make a credit purchase for an item that you are willing and able to purchase with cash low balances and regular on-time payments will build your credit rating. 

Pay Your Bills On Time 
Here is a list to help you in prioritizing payments:
  • Rent or Mortgage - You need your own shelter, not to live in a shelter.
  • Car Payment - Keep current on your car payment as you need it to get to work.  A car can be re-possessed as it is considered a secure loan.  If you default on your payment the bank can take it back.  If your car or lease payment is high you may consider trading in your car for a less expensive model or a pre-owned vehicle. 
  • Credit cards - Strive to make all payments on time so that you will not have a strike against your credit or a late payment fee, or worse yet to have them increase your interest rate.  it's ll in the fine print of your contract with the credit card company-- that's why you need to understand before you sign the dotted line.
  • Utility and Phone bills - be sure to send in the minimum payment so your service is not cut off.  You may need to know the last day you can pay before they disconnect  your service. Call your service company and explain your situation, you may be granted a little leniency or delay in payment if you speak to them on the phone. If you have cable, and are not under contract, this may be something you need to give up for the time being.
  • Insurance Premiums - It's important to not let your insurance lapse on you car or health, but you may be able to lower your rates by increasing your deductible.
  • Secured Loans - not paying on a secured loan may result in your creditor repossessing the property securing the loan. Before defaulting on the loan call the creditor and ask for an extension.
  • Unsecured Loans - Doctor and Hospital bills, legal fees and debt owed to another professional are easier to work with, explain your situation and pay what you can on a regular basis
  • Pay down your debts - Work to pay off debt and do not create additional debt. Your debt ratio (debt owed to total available) accounts for 30% of your credit score. Cut corners wherever you can because it will be worth it in the future.


*It is strongly suggested that you find a reputable divorce attorney to answer any legal questions.  This information may help you to have a better understanding of how divorce affects your credit score and provide insight to the questions you need to ask your divorce attorney, but it in no way serves to completely educate an individual experiencing divorce.