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7 Tips for Repairing Your Credit After a Divorce



Are you recovering from a divorce?

Divorce often damages the credit score and wreaks havoc on the divorcee’s abilities to secure a loan, find a job, buy or rent a home, or even find a good insurance deal.

But how can you improve their credit score after divorce?

Repairing or rebuilding credit score after divorce is not as easy as most people think. There are countless pitfalls, and one mistake could damage it even more.

The good news is that it’s possible. Here are seven time-tested tips that can help you to rebuild credit quickly.

1. Stop Worrying and Focus on What’s Important

This is easier said than done given what you’re going through, but you need every ounce of your energy to build an excellent credit score.

Don’t panic–it won’t help. You should accept the fact that divorce has affected your credit score and acknowledge the fact that rebuilding credit score won’t happen overnight.

Be ready to take one step at a time.

2. Find out Where You Stand

The first thing you need to do after a divorce is reviewing your credit report to determine your current position. You can get your report for free from TransUnion, Equifax, or Experian.

Your credit report will tell you whether your score is good or bad — a good score ranges from 500 to 800; a poor score ranges from 280 to 500.

If you notice errors in your report, you should write an email or a letter to the credit agency disputing the mistake. You should also attach a copy of supporting documentation to prove there’s an error.

If you don’t provide a proof, the error in your credit report may not be rectified.

Also, ensure you understand your credit report and develop a strategy to remove all the negative info in your credit history.

3. Create a Steady Source of Income to Rebuild Credit

Establishing a strong credit history is mostly about paying your bills and debts on time. To achieve this, you need to have a steady source of income.

Although child support and the other maintenance payments you receive qualify, they shouldn’t be your only source of income. Make sure you generate sufficient income to meet all your monthly expenses.

Also, strive to live on a budget. Creating a budget will help to ensure you pay your bills and debts on time, and this will, in turn, improve your credit score significantly.

If you’re not used to managing your finances, you should read as much as you can about budgets and personal finance. You can also take finance-related courses that can equip you with knowledge on payment tracking and financial management.

If you have a good source of income and are still struggling to pay your bills, you might need to seek help from a credit counselor. The counselor will evaluate your financial situation and help you to develop a strategy to improve your payment history.

4. Make Your Joint Debts a Priority

You’ll never be able to improve your credit score if you still have joint debts or joint credit cards with your ex-partner. This is because your ex’s actions will continue affecting your score even after the separation or divorce.

It’s advisable to ensure all the joint accounts have been closed. If there are any joint debts, you should take care of them for your score’s sake.

If possible, ensure the debts you’re responsible for are in your name, and those that your ex-partner is responsible for are in theirs.

Remember that late or missed payments can still damage your credit score even if the court ruled that your ex-partner is responsible for those payments.

5. Get a New Account in Your Name

To control your credit history, you should open a new account and get a credit card (they should be in your name). Getting a new bank account after divorce can be hard, so you should be prepared.

If you had joint accounts or were an authorized user of your ex’s credit cards, however, it may not be hard getting a new account in your name.

If you’re going to change your last name, you should do it before getting a new card. That way, the account you’ll be using going forward will be in your name.

You may also need to contact your previous or current credit card providers and inform them about the change of name.

Some people think that a name change can help them restart a credit history, but that’s not true. Changing your name won’t affect your score since your accounts are linked to your SSN, which cannot be changed.

If you don’t meet the minimum requirements, you can go for a secured credit card. This option requires you to make a cash deposit, which will serve as your credit line.

Secured credit cards work just like any other card, but an issuer can keep a portion of the deposit if you don’t pay your bills.

6. Prove You Can Handle Credit Responsibly

The key to rebuilding a strong credit history is proving you can handle credit responsibly. This includes borrowing what you can afford to pay, paying your balances on time, and keeping your credit debts below 30 % of the credit limit.

It’s also advisable to try and create a healthy relationship with your creditors.

If a creditor knows and trusts you, they’ll have no problem taking off a late or even missed fee. A healthy relationship will also make it easy for you to access loans faster.

You also need to gather some tips for applying and qualifying for credit to increase your chances of securing credit.

7. Have a Credit Repair Company By Your Side

You cannot build a credit score alone; you need credit professionals for guidance.

Hiring a credit repair company will reduce mistakes and make the process smooth and successful. However, you should ensure the company you pick is experienced and has a rich portfolio.

Wrapping Up

Rebuilding credit after a divorce can be confusing and challenging, but you shouldn’t be intimidated. All you need is to follow the tips highlighted above. They will help you rebuild credit and get back on track as quickly as possible.

If you have any questions or need assistance to improve your credit score, feel free to contact us now.

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Credit Score For Mortgage – A Proper Guide



Home ownership is a dream for many, and it shows in the data. As of 2020, 65.8 percent of homes in the US are occupied by the owner. Even in a country where housing price growth has outpaced inflation since 2010, people are still lining up to purchase homes. Get to know how to prepare credit score for mortgage.

Sometimes, though, it may not feel like home ownership is a possibility for everyone. Millennials are particularly pessimistic about their ability to ever be able to afford a home, and they’re concerned that they might not be able to budget for their first home. Not only that, but many people who would otherwise be able to afford a mortgage can’t seem to qualify for one. After the 2008 financial crisis, banks made lending requirements much more strict in order to prevent a housing catastrophe from ever happening again.

The Federal Housing Finance Agency (FHFA) has developed stress tests to assess the likelihood of a mortgage going into default due to macroeconomic factors that influence interest rates. Banks no longer want to hold mortgages that could go into default in case interest rates go up. What’s more striking is that many banks are requiring much higher down payments on homes. As a result, many people can’t qualify for a mortgage, even if it’s their first mortgage.

If you don’t qualify for a mortgage, there’s still a way that you can buy a home. The secret is owner financing.

What is Owner Financing?

Owner financing (otherwise known as seller financing) is a scenario in which the seller of a home decides to provide financing to the buyer directly, rather than the buyer securing their own financing through a bank or a mortgage lender.

The way this works is that the buyer signs a promissory note to make payments as specified by the seller. They can set the interest rate (with some restrictions) and the terms for the agreement. Typical owner financing agreements last five to ten years, after which time one final lump sum payment (also known as a balloon payment) is due.

This may sound a bit strange in a world where mortgages are typically the way to go. However, there are plenty of reasons why a seller may want to offer financing to the buyer directly.

  • Reason #1: Sellers Want to Sell More Quickly

    Selling a home takes time, even once you have a buyer, and many aspects of the process are not in the seller’s control. A buyer needs to secure their financing, which can take some time. The closing process can involve many headaches as well. By financing the home themselves, they can skip a lot of this headache and simply provide the buyer with credit themselves.

    They may be selling a home that needs a lot of work done to it, and by providing financing to the buyer, they can prevent themselves from having to take on an expensive and lengthy renovation project which they may not be able to afford.

  • Reason #2: Seller Can Set Their Own Terms In Case of Default

    When someone defaults on their mortgage, the home is then put into foreclosure. Foreclosure is a legal process that allows a lender, in some cases, to repossess the home and put it up for auction in order to cover the costs of the debt in default. However, a seller might not be interested in doing this in case the owner defaults and may instead want to just take the home back, keeping the down payment and any payments made.

  • Reason #3: Seller Can Sell The Debt Themselves

    Seller financing involves a fair bit of risk on the part of the seller, but they don’t necessarily need to be the one to take on the risk if they don’t want to. At any time, they can sell the promissory note signed by the buyer to some investor looking for cash flow.

What Are The Pros and Cons of Owner Financing?

  • Pro #1: You Don’t Need To Qualify For A Mortgage

    Qualifying for a mortgage can be tough, particularly if your credit is less than stellar. By getting financing from the seller of the home, you won’t need to go through all that hassle. If your credit isn’t good enough to qualify for a mortgage, it’s okay: some sellers will gladly work with you regardless.

  • Pro #2: Closing is Cheaper and Faster

    As stated before, sellers who opt for owner financing generally want to take advantage of a quicker sale. As a buyer, you can save on closing costs and save a considerable amount of time, with a lot less of the headaches involved in closing on a property.

  • Pro #3: No Minimum Down Payments

    The seller will decide what down payment they’re willing to accept. Some sellers will want a larger down payment, but others may be willing to let go of their home for less money down.

    • Con #1: Higher Interest Rates

      Sellers are taking on a greater level of risk by providing financing to the buyer, and because of this higher risk they want to see greater returns. As a result, they will typically set a higher interest rate than you would see from a mortgage lender. Your interest rate, your amortization schedule, and your lump sum payment due will all be in the promissory note that you sign.

    • Con #2: All decisions are at the seller’s discretion

      Just because a seller is willing to finance a buyer doesn’t mean they’re willing to do it for you. If you have bad credit, your chances of being able to secure an owner financing deal are lower, due to the fact that many sellers may not want to take that risk.

    • Con #3: A balloon payment is typically due at the end of the term

      Terms are generally kept short, usually between 5 and 10 years. At the end of the term, the last payment is due and it’s a large lump sum payment for the remainder of the loan. If you are unable to secure the financing necessary to pay for this lump sum, you could potentially lose your house AND all the money you’ve paid.

How Do I Find Seller-Financed Homes?

Sellers willing to provide financing are rare and finding them takes a bit of upfront work. If you’re in the US, there are many places you can find seller-financed homes. The simplest way is to get on your local classifieds site such as Craigslist and send a message to sellers asking if they’d be willing to provide owner financing. Another way is to visit a local MLS site and search for homes that are listed as for sale by owner. Then, check each listing’s comments section to see if they’re willing to provide owner financing.

You can also drive around areas and look for homes that have signs that say “For Sale By Owner”. This doesn’t mean they’re willing to provide financing, but they’re more likely to be willing to do this kind of deal.

Real estate agents are a goldmine of information, too. Call up real estate agents in your area and ask if they know any sellers willing to provide owner financing. Some agents might not have anyone in mind, but others will. You should also tell them to let you know if they come across sellers looking to provide financing.

All in all, you will have to put in more work to find homeowners willing to sell their home to you AND provide financing as well. But, if you can’t qualify for a mortgage today and you want to get into the real estate market, this may be a good option for you.

If you decide that you’d rather get a mortgage instead, check out our guide on how to prepare your credit score for a mortgage!


How To Prepare Credit Score For Mortgage

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How To Prepare Credit Score For Mortgage


Get to know how to prepare credit score for mortgage. If you don’t qualify for a mortgage, there’s still a way that you can buy a home. Read more here.


Jason M. Kaplan, Esq.

Publisher Name

The Credit Pros

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5 Things You Can Do Now To Improve Your Credit In The Long Term



Many people ask “how can I improve my credit now” looking for tips that will help them put 100 points on their credit score in a month. Now, depending on your credit score situation, you may be able to do this. However, if you’ve got a 680+ credit score, it’s highly unlikely that you’re going to be able to add so many points in such a short amount of time.

Instead, think about how you can improve your credit in the long term in order to get closer to that coveted 850 credit score. Here are some tips to help you improve your credit.

  • Start snowballing your debt.

    Snowballing your debt is a debt elimination strategy espoused by personal finance expert Dave Ramsey. This strategy essentially has you pay off your debts starting with the smallest balance. What you do is simple: set up minimum payments for all your current debt except your smallest debt balance. You pay as much over the minimum as you can afford on your smallest debt balance. This way, you start eliminating debt one at a time. When one piece of debt is paid off, you take what you were paying on that debt and allocate it toward the next smallest balance.

    This debt elimination strategy is effective for several reasons. First, it focuses on getting rid of each debt item and freeing up more cash to pay down the larger debt balances. Second, it takes your mind off of the more expensive debt and keeps you focused on the long term goal: being debt free.

    As an added tip: paying down credit cards will have a bigger effect on your credit score than paying down nearly any other type of debt. If you’re concerned with your credit score, get rid of your credit card debt as soon as possible!

  • Set up automatic payments for as many bills as possible.

    35% of your credit score is determined by your payment history. Most people have a lot of different bills they need to pay, and it can get hard to manage. Automatic payments takes the brainwork out of paying your debt obligations. Whether you’re paying the minimum balance or you’re trying to get rid of the debt ASAP, automatic payments can help make sure that you never miss a payment.

    A good payment history isn’t just important for preventing your score from dropping. The longer you go without missing any debt payments, the better it is for your credit score. Most people should see their credit score increase over time so long as they’re making all their payments on time and not being overzealous with their borrowing.

  • Request credit limit increases (but don’t change your spending)

    Another part of your credit score is based on how much debt you owe in relation to your available credit, or your credit limits (when referring to credit cards). The ratio of your card balances and your credit limit is called your credit utilization ratio. If you have a credit limit of $5,000 and you currently owe $2,000, your credit utilization ratio is 40%. The lower this ratio, the better, and generally speaking you want a credit utilization ratio under 30%.

    Increasing your credit limit is a way to “hack” this. Although getting a credit limit increase will reduce your credit score in the short term, the reduction to your credit utilization ratio will be beneficial in the long term so long as you don’t change your spending habits! For this reason, many financial advisors don’t actually recommend this because some people may believe that they have more money available at their disposal. You, however, should know that this is not true and that just because you have more credit doesn’t mean you should borrow more.

  • Dispute any items on your credit report that seem suspicious to you.

    Sometimes, credit bureaus and lenders make mistakes. People often pay for these mistakes and don’t even know it because their credit report might have errors that they’re unaware of!

    In order to have as much control over your credit as possible, you need to be aware of what’s actually on your credit report. If you haven’t, get your free annual credit report from each of the three credit bureaus. You’re entitled to receive a credit report from each credit bureau once per year by law. Learn more about the Fair Credit Reporting Act (FCRA)!

    Once you’ve taken a look at each of your credit reports, look for items that you don’t recognize. If you see any, it’s time to start the dispute process. To do so, you’re going to need to call each of the credit bureaus that is reporting the item in question and file a dispute claim. This process can take some time. If the item in question is indeed incorrect or fraudulent, then you can have that item removed.

  • Freeze your credit if you don’t plan on taking out new loans in the next year.

    One ounce of prevention is worth a pound of cure, and the best way to prevent problems from occurring on your credit report is to make sure that nobody can take out debt in your name.

    This tip isn’t really going to improve your credit score: instead, it’s going to prevent it from going down in case your identity gets stolen. If your credit is frozen, it means that nobody (not even you) can take out new debt in your name. This means that you can’t open new credit cards, get a new mortgage, or borrow any more money.

    To freeze your credit, you will need to contact each of the three credit bureaus. To do so, click the below links to be redirected to the Equifax, Experian, and TransUnion websites and follow the directions provided.

    If this sounds detrimental, don’t worry: it’s not. You can unfreeze your credit at any time by contacting each of the three credit bureaus, similarly to how you froze your credit initially. It takes some time before your credit can be unfrozen, but once it is, you’ll be able to take out loans and open new credit cards again.

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    How To Build Your Credit If Your Credit Is Bad



    Bad credit affects millions of Americans and many of them don’t know how to get out of the hole. Having bad credit can prevent you from getting home loans, car loans, an apartment, and could even bar you from getting certain types of jobs. People with bad credit end up paying higher interest rates on loans, as well. Needless to say, bad credit could make your financial life much harder.

    There are ways for people to repair their credit, even if they are having trouble keeping up with their debt. Here’s how you can start over and rebuild your credit, even if your credit score is currently in the dumps.

  • Get your credit reports and read them in detail.

    Your credit report has all the information you need to start repairing your credit now. It’ll include your payment history, as well as any items that are past due, in default, or in collections.

    There are three major credit bureaus in the United States: Equifax, Experian, and TransUnion. All three of these bureaus are required by law to provide you with a free credit report once per year. If you’re ready to start repairing your credit, then get all of these reports and read them.

    Without reading your credit report in detail, you can’t possibly know what is affecting your credit score. The biggest problems that you might find on your credit report are items in collections, items in default, past due items, missed payments, and high utilization ratios on your credit cards.

    Other issues that can affect your credit score drastically are tax liens, foreclosures, and bankruptcies. However, these are almost never a surprise to anyone. If you unexpectedly find these items on your credit report, or any other item that you don’t recognize, then it’s time to start the dispute process.

  • Dispute any items on your credit report that you don’t recognize.

    Credit bureaus are run by people who get information from other people who work for loan servicers and lending institutions. For this reason, it’s not uncommon for people to have items on their credit report that should not be there.

    Typically, these amount to clerical errors or mistaken identity. If you see anything that shouldn’t be on your record, it’s time to start the dispute process. Before you do, we recommend that you contact the loan servicer and ask them about the loan in question. They should be able to confirm whether or not the loan belongs to you, and if it doesn’t, then you can start the dispute process with the credit bureau with confidence that it will eventually be removed.

    However, you may find debt on your credit report which DOES exist in your name, even though you may have no recollection of taking out that debt! This is a tell-tale sign of identity theft, and in this instance, it’s time to take action. Contact the credit bureaus that are reporting the fraudulent debt and have them begin the dispute process. In the meantime, ask them to freeze your credit so that no more loans can be taken out in your name.

  • Settle any items in default or in collections.

    Items in default or collections can have a major negative effect on your credit score. As a result, it’s important to make sure that you get the debt settled right away.

    Settling the debt does not necessarily mean making payments toward it! Making those payments won’t make any difference to your credit score as you’ve already got a black mark on your report. Instead, you want to make sure that you have an agreement with the owner of the debt. You’ll have to negotiate these items with the lender by calling them directly. If an item is in collections, it means that the original lender is no longer servicing the debt and you’ll have to go to the collections agency that is responsible for collecting the money.

    In general, companies would rather get some of the money back rather than none, which gives you some room in negotiations. They’re generally understanding of a difficult financial situation and simply want to get as much of their money back as possible. By negotiating with the agency you may be able to reach an agreement to pay off the debt for less than you owe.

    You may be able to get some of these items removed by asking the creditor, but in general, items in default or items that go into collections will stay on your credit report even after you settle them. They go away after 7 years, though, so they won’t be around forever, and the more time that passes from the original date of delinquency, the less weight it carries.

  • Calculate the remaining debt that you have.

    Now that you understand the contents of your credit report, it’s time to get an estimate of how deep in debt you really are. Your credit report will also have some important information about your debt balances. They may not be 100% accurate, but that’s okay: simply contact the lender responsible for the debt and they will be more than happy to tell you how much you owe them.

    Tally up all your debt and see how much you owe. You can only move forward when you know exactly what you owe. From here, it’s time to make a plan to pay it off.

  • Make a plan to pay off your remaining debt.

    Paying down your debt is the next step to improving your credit score. Your credit score is based in large part on your payment history and the amount of debt you owe. By creating a good payment history and reducing your overall debt burden, you will see positive changes in your credit score that add up over time.

    One popular strategy is called snowballing. Made popular by financial guru Dave Ramsey, snowballing your debt is when you pay the minimum payments on all your debt except for the smallest balance, which you put as much money into paying off as possible. Once that balance is done, you move onto the next smallest balance. Keep repeating this until all your debt is paid off. This process can take years for some people.

    But, sometimes the debt you owe is simply too much. Your interest rates might be too high, or you might not be able to afford even the minimum payments. Don’t worry: you have options.

  • Options to help you pay down debt:

    1. Refinancing:

      this is when you and the lender agree to a new loan with different terms, usually with a different payment schedule and interest rate. This can be a good option if your payments are high due to a very high interest rate.

    2. Debt consolidation:

      this is where a company lends you money to pay off your previous loans so you’re only responsible for one large loan to the consolidation company. This can be a good option if you need lower payments on your debt.

    3. Balance transfers (for credit cards):

      Some banks allow you to put the balance of one credit card onto another, often with low introductory interest rates, so that you can more easily pay off that card. Make sure to read the fine print of the balance transfer agreement!

  • Pay any and all payments on time, no exceptions.

    Once you’ve committed to making payments on your debt, make sure that you make those payments! Missing a payment could seriously harm your credit score. If at all possible, set up automatic payments with your lender and your bank so that you never miss a payment.

    If you can’t make a payment due to lack of funds, make sure to speak with your creditor. They will likely help you, since they’d rather get something now rather than nothing. They may be able to change your payment date or agree to accept a larger payment later on. You never know until you ask, and it’s much better than simply leaving a debt to go into default.

    If you’re wondering why you should spend the time and effort repairing your credit, learn about the benefits of having an 850 credit score!


    How To Build Your Credit If Your Credit Is Bad

    Article Name

    How To Build Your Credit If Your Credit Is Bad


    Learn how to build your credit if your credit is bad. Having bad credit can prevent you from getting home loans, car loans, an apartment, and much more.


    Jason M. Kaplan, Esq.

    Publisher Name

    The Credit Pros

    Publisher Logo

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