This is the uplifting portion of my two-part series about single moms and credit. In Part 1, we ran down how important it is to get your credit in line — your family’s future depends on it.
Here, we get tips from our resident credit expert Beverly Harzog about steps to take to get yoru credit in order. I broke the advice down into various life stages:
You’re married but fantasizing about getting divorced
- Check your credit score. Face your reality and go to AnualCreditReport.com for a free check of your scores. It’s free, people. You don’t have an excuse.
- Get a credit card in your own name, and use it responsibly. “Remember: there is no such thing as joint credit,” Harzog says. Got that? If your mortgage, car note and credit cards are held in your husband’s name, you may have terrible credit — no matter if your husband runs a hedge fund and gets Visa Platinum offers in the mail daily. Further, if you have no income of your own, you may have trouble getting a credit card.
- If you do have cards in your name, figure out who is an authorized user. Is it your husband? Are you 100 percent sure he will not use it to run off with the babysitter to Cancun? Even if you’re married to a wonderful person (whom you just happen to want to punch in the face daily), remember that divorce brings out the worst in people. Even if Mother Teresa divorced from God, there would have been moments of nastiness. Protect yourself.
- Pay your bills on time. Electric, phone, insurance — these all count towards your credit score.
- Get a job. Even if you don’t think you need one, you do. Credit cards often require a source of income from applicants. You need your own credit card to get around this world.
You’re in the process of separating or divorce
- Check your credit score. Just do it. If for no other reason than to make sure your ex is not racking up charges or buying a Miata with your hard-earned good credit. AnualCreditReport.com
- Get him off all your cards and accounts ASAP. You are starting a new life, and that means a new financial life, too.
- Stay on track. It’s a fact — divorce is one of the most stressful periods of your life. Nearly ever relationship in your life and facet of your being will be challenged. Keep paying those bills on time — especially the credit card. Don’t wrack up any more debt — these next few months and years will be full of change and probably a few surprises. Play it safe.
- Watch the balance-to-credit ratio, keep it below 30 percent. This means, if you have a $10,000 limit on your card, don’t carry more than a $3,000 balance. This a) ensures a good credit score, and b) gives you a line in credit if you need it to establish your new life.
You’re a new a single mom
- Check that credit score. AnualCreditReport.com
- If you have no credit or terrible credit, get a secured credit card. These require a minimum security deposit and are the easiest, quickest way to rebuild credit (if used responsibly).
- Decide that your new life will be one of good credit: set up automatic payments and text alerts to assure your bills are paid on time, only charge when you absolutely need to, and set goals for boosting your score with an eye towards other goals: buying a home, retirement, family vacations and peace of mind.