Credit report errors can be costly and divorce magnifies those costs. In fact, some errors could even prevent you from implementing each item in your divorce decree leaving you in contempt of court. Therefore, it is crucial that you correct material mistakes on your credit report as soon as possible.
Errors on credit reports are common and happen to people with good and bad credit. Significant errors like a collection, lien, or late payment can lower your score as much as 100 points or more. Lower credit scores because of errors can easily cost you thousands of dollars in higher rates and fees. They can even make you ineligible for some financing. If you are required to refinance a mortgage to pay your spouse for their share of the house, you will be in contempt of court if you do not refinance which could force you to even sell your home.
Divorce amplifies the costs of credit report errors for several reasons:
- DIVORCE IS TOUGH ON CREDIT SCORES – Credit scores often go down through a typical divorce process due to rising credit card balances, multiple credit inquiries, and new accounts.
- MISTAKES ARE COMMON – Most couples, and even their professionals, make at least a few mistakes with credit during their divorce lowering their scores even further.
- THERE IS A LOT TO DO – Completing the divorce process usually requires a series of transactions for each spouse. Not only can many of these lower credit scores even more, but lower scores can make each one progressively more costly.
People who pay companies to fix their credit reports usually pay too much and get far too little. Instead of paying someone to fix your credit, you simply need a plan to fix it yourself. The time you spend will likely provide better results, but you will learn a lot more about credit.
Most people try to fix errors on their credit report by filing a dispute with the credit bureaus and then waiting for an answer. The problems with this approach are that it usually takes several weeks, it frequently does not work on the first try, and you may not have that much time. A better way is to drive the process yourself.
To fix your credit report, follow these simple steps:
IDENTIFY ERRORS – subscribe to a credit monitoring service and review your report monthly.
VERIFY THE ERROR – contact the creditor to verify their records and confirm the error.
DOCUMENT THE ERROR – contact the creditor and provide the proof to them of the error.
GET A LETTER – Get a dated letter on letterhead with address, phone number, and contact name from the creditor that includes your name, account number, and details the error and specific correction to be made.
FIX YOUR CREDIT REPORT – send the letter to all three credit bureaus to fix your report.
VERIFY THE FIX – monitor your report to ensure the bureaus correct each error.
- Inquire about a Rapid Rescore if you need your credit updated immediately for a loan.
- Even driving the process can still take a lot of time and effort. So, start now!
- You may need to call several times to get the right person to help you so be persistent.
As you can see, maintaining accurate credit during divorce is imperative during divorce because of the normal drag on scores, common mistakes, and risks of not fully implementing your divorce decree. You can do it on your own if you have a plan, but it still takes time and patience. In the end, you will usually wind up with greater success using these steps and driving the process yourself.