Lose a Job or Spouse? Protect Your Credit Score and Report
Losing a job or a spouse to divorce or death is extremely hard.
That hardship shouldn’t be made worse due to a dropping credit score. Unfortunately, that is exactly what can happen and does happen to thousands of people every month. By being proactive, you can protect yourself and your credit score after a major life change.
After the loss of a spouse due to death, the last thing anyone feels like doing is taking care of the financial red tape. So ask for help from a family member, friend or even a professional so that what needs done won’t be put off until it is too late.
Accounts shared with the deceased cannot be renegotiated for better terms.
The accounts will have to be opened under only your name. Unfortunately, if your credit is already bad, this can cause a problem due to the lender not being willing to extend credit to only you. For this reason, it is very important to maintain some credit in your name throughout life. However, if the account is extremely close to being paid off, within 2-3 months, contact the lender and ask to pay off the debt and close the account.
Accounts under only the deceased name will have to be looked at on a case to case basis.
For instance, accounts like credit cards that have insurance protection may be paid in full upon death. Phone, electric and other utilities will need to be closed as soon as possible and new accounts opened in your name. The old accounts can usually be paid off in a given amount of time, but the new record of timely bill payment in your name will boost your credit score.
When you lose a spouse to divorce, things can be much uglier and even criminal so you must take steps to insure your financial well being and credit score. You should contact all three of the credit reporting agencies and put your new contact information in you credit reports. This will help in separating your financial transactions from your spouse’s transactions. Accounts that are shared with the divorcing spouse should be closed and paid off quickly, but you may need a lawyer to do so.
Prevent your spouse from intentionally causing you financial and credit score ruin.
Secure your mail either through the post office or diligently watching for it to prevent the theft and use of pre-approved credit cards and other items. LifeLock can also be considered to provide unwavering security of your social security number so that your soon to be gone spouse doesn’t steal your identity and hijack your credit.
Losing a job can be quite a financial problem, but it doesn’t have to be as bad as when you do nothing.
Be brave and talk to lenders about your situation. If you have a good credit report and credit score, payments can probably be reduced or even extended until you have another job. Creditors are in the business of making money after all, and they don’t want you to just give up on making the payments.
Everyone should ask yearly to have a copy of their credit reports from the three credit reporting companies and check it for errors. Federal law states that the companies must give a free credit report once every twelve months.
However, it is always a good idea to check the reports when the hardship of a major life event happens also. Knowing your credit score and what your credit reports say about you will help in dealing with creditors.