Is it possible to repair your credit record after divorce?
Problem
I divorced my husband 3 years ago. I was not working at that point of time. So, I could not pay off most of my credit card bills at that time. One of my credit accounts was charged-off by my creditor as he lost all hope of recovering the money. However, I have started paying back the bills bit by bit. I have even enrolled in a San Antonio debt consolidation to get out of the huge amount of debt. But will that help my credit score? So far, it has not increased my credit score. Is there any point in continuing to pay off the debts when my credit is not improving? What should I do? I live in San Antonio, Texas.
Solution
It is quite hard for a woman to go through a divorce. But it is even harder for a woman to deal with financial problems post divorce. It will take time to heal your emotional scars, and it will take longer to get out of credit problems. This is because there is no tool by which you can repair your credit instantly.
As far as charged-off account is concerned, paying it off will not raise your credit score right away. This is because credit scoring models will regard you as a high-risk borrower till you prove that you can really make the payments. It is true that older charged-off accounts have less negative impact on credit score. But if you stop making payments on the charged-off accounts, then you’ll face problems in securing a loan later on. The reason is, prospective lenders/creditors will check your credit report before granting your loan application. They will hesitate to approve your application on finding that you have not paid off the charged-off account.
You have taken the right decision by enrolling in a San Antonio debt consolidation program. This will definitely help you in paying off your past due debts. Debt consolidation doesn’t have a negative impact on credit score. But that does not mean that it will raise your score within a month. It will take considerable amount of time. Make sure you keep on adding positive information on your credit report and your score will improve with time.
After going through your query, I feel that anyone who is in your position should continue to pay off all your past due accounts as soon as possible. Had you not enrolled in a San Antonio debt consolidation program, then I would have advised you to pay back your creditors on your own. Another important thing that should be kept in mind is budgeting. Sticking to a strict budget will help you reach your financial goals and improve your damaged credit sooner.
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