Heymann & Fletcher

After a divorce, aim for a healthy balance of new and old credit

Many New Jersey spouses emerge from the end of a marriage somewhat stunned, and feeling emotionally exhausted. It can be hard to remember that this is a time of renewal, when an individual has the chance to chart a new course for the rest of his or her life. Gaining financial stability is an important part of that process, and should be a primary post-divorce plan. Attaining the right balance of credit is a great place to begin.

Most people know that having between three and five open credit card accounts is a good way to boost credit scores. However, fewer people are aware that the length of time that an account has been open also factors into credit scoring. That means that spouses who have had one or more credit card accounts for a significant period of time may want to keep those accounts open. In order for that to be a solid financial move, however, it is necessary to check to make sure that the terms of those accounts are in line with current credit offers.

If the interest rates are high or the fees unwieldy, it is possible to contact the credit card issuer and ask for better terms. This can be very effective, especially if the consumer has held the card in good standing for many years. Be prepared to quote the exact terms of card offers from other issuers, which reminds the credit card company that you have other options.

It can also be helpful to open one or two new cards, especially if the terms or good or if there are significant rewards offered. While a New Jersey resident may experience an in initial decline in credit scores in the months following a divorce, that drop can be more than made up for by establishing excellent credit habits in the months and years to follow. Attaining the right balance of credit card accounts is a powerful part of that process.  

Source: nerdwallet.com, "How To Assess Your Credit Card Needs After Divorce", Virginia C. McGuire, April 13, 2017

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