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Thursday, August 7, 2014

Don't Let Divorce Damage Your Credit!

Hashing out the financial aspect of a divorce can be difficult and stressful. Marriage is a financial partnership; During a divorce, these financial bonds must be broken correctly in order to avoid detrimental effects to one or both parties' credit. Below are some tips to help you avoid detrimental effects to your credit while dealing with divorce.

1. Check your credit and ask your partner to check his or hers at the very beginning of the process.
It's a smart idea to be aware of your credit score and what you and your partner owe before you begin divorcing. You can request a free credit report once a year from the official credit report site run by Experian, Equifax, and Transunion.

2. If you have no individual credit, now is the time to establish it.
Once the divorce is final, you will be dependent on your credit report alone. You can build up your individual credit by opening a card in solely your name. Opening a credit card can be an important step on the path to financial independence.

3. Discuss how to deal with joint loans, such as the mortgage and/or car loans.
You and your partner will need to decide which party will take on responsible for any joint loans acquired during the marriage. Joint bank accounts should be switched over to one name early in the process to avoid any one party withdrawing funds without the consent of both spouses. Likewise, any credit cards in both spouses' names should be switched over to one party immediately. Don't let your credit be put in jeopardy by an vindictive spouse! Additionally, be sure to check of all your financial records to avoid overlooking smaller debts such as a store card or gaming accounts.

4. Place a fraud alert on your credit.
You can request for one of the three major credit agencies to place a "fraud alert" on your credit for at least 90 days. Placing a fraud alert on your credit means that your credit bureau will contact you any time an account is opened in your name, obtain another credit card or increase your credit limit. With a fraud alert, you will immediately know if someone other than yourself is attempting to use your credit.

If you are considering divorce, getting in touch with a divorce attorney can be both a smart and comforting move. An attorney can review these steps with you and assist you with financial entanglements you may have as a result of divorce. If you or a loved one is considering divorce, feel free to contact our office at (718) 313-7563.

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