Re-building credit is similar to building credit but with more work to do. If this is the area you need help in don’t be discouraged if it was impossible I wouldn’t bring it up. This is my favorite topic when someone walks into my office. Why you may ask? I love to help people.
First and foremost be honest with yourself, if you are going down the road towards bankruptcy pump the breaks a few times. Take a look around, have you done everything you could? Can you sell some things? Garage sales aren’t easy work but there is money sitting in your house that you don’t use anymore or try an online sale site. Can you take a roommate? Is a second job an option? I recognize that if you are a single parent and a second or third job may not be the right for your family at the end of the day.
I’m not saying that bankruptcy is the worst thing in the world and if you are there or have recently gone through a bankruptcy you aren’t alone do not feel like a failure if you were the first one or the only one that had ever done it they wouldn’t have a list of bankruptcy attorneys. I say the exact same thing to anybody who feels down or like they “failed” if they get divorced. You are not alone! Find a friend and just tell them you are going to call occasionally you know they can’t fix anything (unless they have mob ties) you just need someone to talk to. This advise is for divorce as well as finical, everyone at one point or another has been broke.
Divorce takes a hard toll on a credit score all of the sudden someone is pulling credit for an apartment or second home. Which really can red flag to a bank especially if you are going to start to get your separate accounts. I have seen on several occasions where customers will come into the bank and have collections notices from the bank for a credit card or line of credit or mortgage that they have been advised by their lawyer that they are not responsible for making those payments because they aren’t living there or that isn’t your charge for this or that. MAKE THE PAYMENT! ON TIME, EVERY TIME! In my experience if you start missing payments the credit companies don’t care if you are getting divorced. Even if it is just a minimum and the court makes the ruling that the other is responsible for the debt you will have the receipt saying you made this payment and they will decide if you will be awarded those expenses back. Repairing credit will take you much more work on the back half of the divorce than the payments will be month to month. Making minimum payments are never the best idea, a lot of the time it is the only option I understand that.
If you are coming from a divorce then you should go get your credit report make sure everything on your report is yours! Go to Annualcreditreport.com You are no longer ours it is now either his or hers black and white. If you even have a store card that isn’t something you will use i.e.: hardware store or store card that you don’t use get it shut down. Contact the company you can either report it “compromised” incase they may have it written down somewhere get their name off the account even if you have to re-apply (if you want to keep it, like I would have no need for a V. Secret card if something happened to my wife and I) In one of my recent posts I did say never close a credit account, this would be the exception to that rule. If you are finishing a bankruptcy You are going to need to swallow some pride and get a co-borrower most likely or get a secured credit card or higher percentage rate on a loan with a shorter term. Very common to only be able to borrow for 36 months at most for a few years. The same ideas apply though get a secured credit card and use it to pay for gas only or for monthly subscriptions i.e. Netflix, Hulu, your cell phone, a single set amount that you are going to pay from your checking account anyway. If you can get a loan for $3,000, take the proceeds into a separate account maybe at a different bank if you think you will spend the money. Set it up on an auto pay to the loan. Make sure you are getting a free account where ever it is. Don’t be in a rush to get the account in most national banks you will run into a monthly service fee. You may need a credit union or a “small hometown” bank to get a totally free account. You may need to do a little research and see if you will get a service fee before you decide on an account.
Anyone who knows me know parts, most, or all of my story:
I worked my ass off from 16 to today to have what I have. I had a low time in my life that took me down a rough road. I broke my back and had 8 surgeries. I couldn’t work for over a year I had enough money in my saving to may my car loan payments for 11 months my worst 3 months were when I asked my parents to make those payments because I couldn’t get back to work yet. I used my credit cards to buy Christmas presents and made a few other mistakes during that time. None of my family expected any gifts from me that year, but I was proud and said if I couldn’t afford it I wouldn’t be buying it. That was a lie, I couldn’t afford it. A few years go by everything is going great I get married we have our first child I’m the luckiest guy alive. Then I lost my job in 2014 while my wife is pregnant with our second child. Once I found my current company I started at a lower salary. I took a second job to make sure we didn’t get behind. While we never filed for bankruptcy or asked for any help from our parents or grandparents it was hard, at the time my boys were under 3 and they didn’t understand why I only saw them from wake up time usually 7:00ish till daycare about 8:00, 5 days a week my one day off with my family was Sunday otherwise I was at work at least till 4:00 the other six days.
That is part of my story… What is yours going to be?