Getting through a divorce is a long and tedious process. Many parts of your life will change, and your financials are not exempt from that change. Besides separating from your former significant other, a divorce can also damage your credit if you are not careful.
It is important to know that any agreement that you may have reached with your ex-spouse during your divorce is not something that your lenders may have agreed to. You may also be experiencing a large loss of income. Getting financed with 2 incomes may have been easy, but you may have to shop more modestly now that you have 1 source of income.
Your first objective before applying for a loan should be to get your finances in order. Know that if you had joint accounts on lines of credit such as an auto loan or mortgage, those accounts could potentially impact your accounts negatively. Typically, these accounts can lower your credit score by making it seem that your credit utilization was high along with your debt-to-income ratio. In turn, it can be much harder to apply for the car loan that you need.
Be sure to call all your lenders and credit account providers and notify them of the divorce. As long as your name is attached to any accounts with your ex-spouse, you will be held liable for those debts even post-divorce. Tell your creditors and account providers that you would like your name completely removed off any shared accounts with your ex-spouse. If you do not complete this essential step, you may have your finances and credit score affected heavily.
If you are still in need of a car post-divorce, check out the following tips:
Obtain copies of your credit score and reports
Remember, you are entitled to a FREE copy of your credit score and report from www.AnnualCreditReport.com, the government mandated website. Be vigilant about checking your score and report for the next 6 months, as you may see changes to your score from obscure and long forgotten accounts you may still share with your ex-spouse.
Know your credit history
Many lenders understand that a divorce can change your credit dramatically and that not all changes to your score were made due to your actions. If you had good credit prior to the divorce, bring that up to the lender. Remember there is a key difference between situational bad credit and habitual bad credit.
Have a down payment ready
Show you are committed to your loan by providing a down payment for your lender. This will also help increase your equity share in the vehicle
Use all sources of income
If you receive child support or alimony after a divorce, that counts as a source of income. Bring documentation with you to your lender and show them the agreement that you were awarded by the family court.
A massive life change such as a divorce can come as a shock to many. However, understand that the quickest way to heal is to move on, especially in financial terms. If you are looking for an auto loan, CrediReady can help. Complete our fast, free, and secure application today and we will connect you to our database of dealers and lenders all over the country that can get you in a car that fits your needs.