When I was going through my divorce, one of the big question marks was my apartment.
My ex had made more than me, plus of course, our combined incomes was higher than mine alone. Plus, the home was a fantastic investment, and moving would raise my cost of living significantly.
Also, it was our home – familiar, close to our daycare, and in a building full of neighbors who supported us when we were going through the worst of it.
Credit after divorce was paramount. I watched mine like a hawk: no matter how broke I was, how much juggling was required, I make sure my bills were paid on time, and my credit ratios were solid.
Fortunately, I had good credit when I was married, and I also had an income. I kept those two things going until shortly after my divorce when I refinanced, bought out my ex and now am a proud owner of a big fat mortgage. Yeah me!
The point is, good credit gives you options. And when every single point in your life is a giant cluster tangle of uncertainty, it can be hard to remember to keep your nose clean and take care of business.
Here I could point to the much-referenced study that found that women's standard of living dropped by 26 percent on average after a divorce. But I won't, because we're not going to let that happen.
Interview with Beverly Harzog
Today I interviewed Beverly Harzog, a credit card expert and consumer advocate, who said that women often let their credit slip (or never paid any attention in the first place), and realize the err of their ways only when it's too late. “When you're going through a divorce you're so vulnerable financially. Even if you have a high paying job, you're still insecure about the future,” Harzog says. “The better credit you have, the more options you have. Many women don't realize that credit affects your whole life.”
Bad credit can make it hard or impossible to:
- Rent an apartment
- Refinance or buy a home
- Buy or lease a car
- Get a credit card
- Get a job (almost half of employers run credit checks on job candidates)
- Start a business
- Get a man (sorry, just telling it how it is)
Scared yet? Stay tuned until tomorrow when I'll break down how to care for your credit, whether you're recently divorced, in the middle of a separation, or fantasizing about single motherhood.
Here is advice credit expert Beverly Harzog about steps to take to get your credit in order. I broke the advice down into various life stages:
Credit tips if you're thinking about divorce
- Check your credit score. Face your reality and get you credit score and report from one of the three major credit reporting agencies, Experian, TransUnion, and Equifax.TransUnion will provide your credit score and report for a monthly fee, but also provides its free TrueIdentity credit lock program, which lets you monitor your credit activity and lock your account.
- 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.
Credit after divorce or separation
- 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. I recommend TransUnion.
- 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.
Credit tips for single single moms
- Check that credit score:
- 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.
More on money and credit for single moms:
Emma Johnson is a veteran money writer, noted blogger, bestselling author and and host of the award-winning podcast, Like a Mother with Emma Johnson. A former Associated Press Financial Wire reporter and MSN Money columnist, Emma has written for the New York Times, Wall Street Journal, Forbes, Glamour, Oprah.com, REAL SIMPLE, Parenting, USA Today and others.
The Kickass Single Mom: Be Financially Independent, Discover Your Sexiest Self, and Raise Fabulous, Happy Children (Penguin, 2017), was a #1 bestseller and was featured in hundreds of media, including The New York Times, Wall Street Journal, Fox & Friends, Oprah.com and the New York Post, which named it to its ‘Must Read” list.
Her popular blog Wealthysinglemommy.com, and podcast Like a Mother, explore issues facing professional single moms: business and career, money, sex, relationships and parenting. Emma regularly comments on these topics for outlets such as CNN, Headline News, New York Times, Wall Street Journal, Fox & Friends, CNBC, NPR, TIME, MONEY, O, The Oprah Magazine, Woman’s Day, The Doctors, and many more. She was named Parents magazine’s “Best of the Web,” one of “20 Personal Finance Influencers to Follow on Twitter” by AOL DailyFinance, “Top 15 Personal Finance Podcasts” by U.S. News, and “Most Eligible New Yorkers” by New York Observer.
A popular speaker on gender equality, Emma presented at the United Nations Summit for Gender Equality.
Emma grew up in Sycamore, Ill., and lives in New York City with her children.
Emma Johnson is a veteran money journalist, noted blogger, bestselling author and an host of the award-winning podcast, Like a Mother with Emma Johnson. A former Associated Press Financial Wire reporter and MSN Money columnist, Emma has written for the New York Times, Wall Street Journal, Forbes, Glamour, Oprah.com, U.S. News, Parenting, USA Today and others. Her #1 bestseller, The Kickass Single Mom (Penguin), was named to the New York Post's ‘Must Read” list.
Emma regularly comments on issues of modern families, gender equality, divorce, sex and motherhood for outlets like CNN, Headline News, New York Times, Wall Street Journal, Fox & Friends, CNBC, NPR, TIME, MONEY, O, The Oprah Magazine and The Doctors. She was named Parents magazine’s “Best of the Web,” “Top 15 Personal Finance Podcasts” by U.S. News, and a “Most Eligible New Yorker” by New York Observer.