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Forbes
a day ago
- Business
- Forbes
Safeguarding Your Credit During Divorce
Reviewing your credit report is one step towards ensuring you build a stable foundation for your ... More financial future. Divorce is an emotionally and mentally taxing experience, and amid the legal and personal upheaval, it is easy to overlook your financial health, especially your credit report. Many people only think about credit when applying for a loan or making a major purchase, but during a divorce, your credit report can play a pivotal role in safeguarding your financial future. Taking the time to review and understand your credit report can help you catch errors, identify shared debts, and prevent unexpected financial setbacks. It's a small but powerful step toward regaining control and building a stable foundation for your next chapter. What is a Credit Report and Credit Score The higher your credit score, the more likely you are to qualify for favorable loan terms, lower ... More interest rates, and better financial opportunities. A credit report is a detailed record of your loans compiled by credit reporting agencies (also called credit bureaus) like Equifax, Experian, and TransUnion. It includes information such as the timing of your open and closed credit accounts, payment history, outstanding debts, and any public records like bankruptcies or foreclosures. Your credit score is a three-digit number that typically ranges from 300 to 850. This number summarizes your creditworthiness based on the data in your report and potential lenders use this score to assess how likely you are to repay borrowed money. A good credit score is often deemed to be a number in the mid 600s and above. The higher your score, the more likely you are to qualify for favorable loan terms, lower interest rates, and better financial opportunities. In the U.S., you are entitled to one free credit report per year from the three major credit bureaus: Equifax, Experian, and TransUnion. You can request your report online through or directly from the credit bureau. How Divorce Affects Credit Scores Divorce does not directly impact your credit score, as your marital status isn't included in your credit report. While every individual has their own credit report tied to their Social Security number, divorce can have a significant impact on your credit health due to how shared financial responsibilities are handled during and after the separation. Below are the key items to understand as you review your report. After a divorce, you can use your credit report to verify that financial agreements made during the ... More divorce are being followed and that no unpaid debts are accumulating under your name. Identifying & Planning for Joint Liabilities: If you and your spouse shared credit cards, were both on a mortgage, loans, or other joint accounts, both of you remain legally responsible for those debts during and even after the divorce. A good first step is to review the sections about credit accounts and public records carefully and take note of all listed liabilities. Make sure you understand what each item is related to and communicate this to your team so they can document all liabilities and help ensure they are accounted for on your Marital Balance Sheet. If joint liabilities are tracked throughout the process, this can help you come to an appropriate settlement, rather than being surprised by debt towards the end of the process. If there is an account that appears to only be tied to your name, be sure to check on authorized users as well. It is possible that this line of credit is not joint, but your former spouse has access which gives them the ability to impact your credit. It is good to be thoughtful about the liabilities and credit accounts that you would like to keep after the divorce so you can factor this into your agreement but know it will not always be possible to maintain your existing accounts. For example, if one individual has all their auto-payments tied to one account, it could be nice to remove the other from the account rather than closing it, but some institutions will not allow that if the spouse was not already the primary user. Reviewing for Vindictive or Fraudulent Behavior: In some unfortunate cases, one spouse may intentionally damage joint credit accounts out of spite or simply fail to manage them responsibly. With access to all of your personally identifying information, a former spouse could open credit lines in your name or misuse joint accounts without your knowledge. This can lead to increased debt, past due payments, or even collections, all of which hurt your credit. Reviewing your report will help avoid long-term damage from this going on unknowingly. Additionally, financial fraud is growing each day, and by reviewing your credit report, you can help ensure there are no unauthorized accounts opened without your consent or irregular activity even if they are not related to your former spouse. After confirming that nothing looks amiss, there are are steps you can take, such as placing a fraud alert or freezing your credit to help protect your financial identity. Keep in mind this prevents lenders from checking your credit so if you are opening new accounts or taking on new loans, you will either want to wait until these are approved or temporarily lift the freeze. You can freeze and unfreeze your credit for free, but you will need to contact each bureau individually. Do not be alarmed if you see some closed lines of credit listed on your report after the divorce. Closed accounts in good standing can remain on your credit report for up to 10 years. These can help your credit score by contributing to a longer credit history and showing responsible past behavior. Freezing your credit to can help protect your financial identity. Executing & Tracking Post-Divorce: A divorce decree or marital settlement agreement may assign responsibility for certain debts to one spouse, but creditors aren't bound by that agreement. If your name is still on the account, you're still liable in the eyes of the lender. After the divorce, you should verify that all financial agreements made during the divorce are being followed and that no unpaid debts are accumulating under your name. You can refer to the terms of your divorce decree or Marital Settlement Agreement to help ensure proper action is taken to close joint accounts or reassign these liabilities. Each institution will have a different process for removing or closing accounts so try to communicate as clearly as possible with your former spouse to help ensure no one is caught off guard by these transitions. Understanding your credit will help you determine different options for your next chapter. Understanding Your Options Moving Forward: If you didn't have credit in your own name during the marriage, it is important to understand your credit limit and score might be lower than expected even if you do not have any negative marks on your report. This is because the length of credit history and having a mix of different types of credit can impact your score. It can take time to build and there are credit card options for individuals with little to no credit history. The good news is that if you were a joint owner with good credit habits, the credit history will remain on your report and if you were an authorized user, often times this data is reported to credit bureaus to help build your score. If you have a joint mortgage, it is important to discuss your options with your team. While sometimes possible, it is not always the case that one spouse can assume the existing mortgage. Often times, you will need to obtain a new mortgage based on current interest rates and income or assets post-divorce which can greatly impact one's ability to keep the marital home. Divorce is a significant life transition, but taking control of your finances by reviewing your credit report can prevent future complications. What could you discover or prevent by taking a closer look at your credit today?
Business Insider
2 days ago
- Business
- Business Insider
The summer is looking grim for millions of student-loan borrowers behind on payments
The student debt collection machine has been turned back on, and it could mean bad news for millions of borrowers later this summer. President Donald Trump's announcement that collections on defaulted student loans would restart on May 5 left borrowers behind on payments facing a scramble: make payments to avoid entering default, or find a way to get out of default to avoid wage and federal benefits garnishment. A new analysis from TransUnion, a credit reporting firm, showed an uptick in borrowers at risk of facing those consequences this summer. It found that 31% of borrowers have a payment of more than 90 days past due as of April — up from 20.5% in February — and it estimates that of the 5.8 million newly delinquent borrowers, 1.8 million of them could default in July. The analysis said an additional 1 million borrowers could default in August, followed by another 2 million in September. "That begs the question, why is that number so high right now?" Joshua Turnbull, senior vice president and head of consumer lending at TransUnion, told BI. "That number is either high because people cannot afford to pay their student loans, or don't think they can afford to pay their student loans, or people can afford to pay their student loans and they're just either choosing not to, or don't know they need to." A federal student-loan borrower typically enters default after not making payments for over 270 days. Over the course of the pandemic, borrowers behind on payments were spared from garnishment and negative credit reporting due to a pause put in place by Trump and continued under former President Joe Biden. Negative credit reporting resumed in October 2024, and while the Department of Education said in early June it would be pausing Social Security garnishment, wage garnishment will resume later this summer. The department did not respond to a request for comment from BI on a specific date that wage garnishment will begin. The Department of Education said in April that restarting collections will "move the federal student loan portfolio back into repayment, which benefits borrowers and taxpayers alike." Turnbull said the economic implications of delinquency and default — including hits to credit scores and losing part of a paycheck — could be severe. "Those are things that, I'm not only behind in paying on my student loan, but now my income stream is impacted as well," Turnbull said. "So, it's kind of a compounding effect that consumers would see." Options for student-loan borrowers to avoid default Turnbull said that problems start for borrowers behind on payments once their delinquent status is reported. At that point, their credit scores will decline, and it could immediately impact their abilities to get mortgages, competitive auto loan rates, and more. "I would just encourage anyone who has a student loan, is not paying on that now, and is confused or worried about where they're going to come up with the funds, don't wait," Turnbull said. "Don't wait until you get that 90-day delinquency to figure out what your plan is, or to figure out where you're supposed to send your payment." Some borrowers who took the initiative to start a repayment plan are still struggling. Michael George, 31, is in default on his student loans. He said he contacted Federal Student Aid's debt resolution group to begin loan rehabilitation, which requires a borrower to make nine payments within 20 days of the due date over a period of 10 consecutive months. While Federal Student Aid's website said that wage garnishment will continue until a borrower makes at least five rehabilitation payments, George said his servicer gave him conflicting information regarding the repayment schedule requirements, and he made payments that ended up not counting toward his rehabilitation plan. "There's no proper information, there's no consistency, there's no one streamlined black or white conciseness," George said. "It literally feels like a dumpster fire of how rapid the announcement was." Along with loan rehabilitation, borrowers can also consolidate their defaulted student loan into a federal direct consolidation loan. While this option is quicker than loan rehabilitation, a key difference is that the record of the default will remain on the borrower's credit history. Borrowers can also file for bankruptcy using a process that was streamlined under Biden. Some borrowers who voted for Trump previously told BI that while they support efforts to collect student loans, the abrupt nature of the collections restart has sparked confusion and alarm among those in default, or at risk of defaulting. Linda McMahon, Trump's education secretary, said in an opinion piece that the collections restart is not intended to "be unkind to student borrowers." "Borrowing money and failing to pay it back isn't a victimless offense," she said. "Debt doesn't go away; it gets transferred to others."
The Guardian
3 days ago
- Business
- The Guardian
People in the US: have you fallen behind on federal student loan payments?
Nearly one in three federal student loan borrowers are at risk of defaulting on payments as early as July, as delinquency and default rates soar in the wake of pandemic-era repayment relief ending. About 5.8 million federal student loan borrowers – roughly 31% – were 90 days or more past due on their payments as of April 2025, according to a new analysis from TransUnion. Borrowers fall into default once they are 270 days past due. Based on current trends, approximately 1.8 million borrowers could reach default status in July 2025, making them subject to wage garnishment and other collection actions by the US Department of Education. In May, the government resumed collecting on defaulted student loans after a five-year pause starting during the pandemic. We want to hear from federal student loan borrowers. Have you fallen behind on payments? Are you at risk of delinquency or default? What has caused you to fall behind, and do you have concerns about the consequences? You can tell us your experience of federal student loan payments using this form or by messaging us. Please be as specific as possible when discussing your loans and repayments. Please include as much detail as possible. Please include as much detail as possible. Please note, the maximum file size is 5.7 MB. Your contact details are helpful so we can contact you for more information. They will only be seen by the Guardian. Your contact details are helpful so we can contact you for more information. They will only be seen by the Guardian. If you include other people's names please ask them first. Contact us on WhatsApp at +447766780300. For more information, please see our guidance on contacting us via WhatsApp. For true anonymity please use our SecureDrop service instead. If you're having trouble using the form click here. Read terms of service here and privacy policy here.
The Citizen
5 days ago
- Business
- The Citizen
Are you a young professional? Here's how to avoid the debt trap
Beware! With fulltime employment, creditors are eager to help you accumulate debt. As a young professional it is easy to get caught up in all the 'must-haves' such as shiny wheels, a branded briefcase or expensive shoes. All bought on credit of course! However, once you have bought all the trappings a young professional needs, you can end up with a mountain of debt that you probably will not be able to afford to pay off. Christiaan Coetzee, CEO of FinFix, says starting your professional journey is exciting with a steady income, financial independence and the ability to finally say yes to things you have been putting off until you start working fulltime. 'But with this newfound freedom comes responsibility, especially when it comes to credit. South African youth are increasingly vulnerable to debt traps, often lured by the promise of 'buy now, pay later' without fully understanding the consequences,' he warns. ALSO READ: Will South African youth achieve financial freedom? — Tomorrow's leaders drowning in debt today Uptick in debt among young professionals Recent data indicates a significant uptick in credit usage among young South Africans. According to TransUnion's Industry Insights Report for the second quarter of 2024, the number of credit-active consumers grew by 4.7% year-over-year to 18.5 million, with Millennials and Gen Z accounting for 62% of new credit originations during the quarter. Notably, Gen Z's share of new credit card accounts increased by 22.7% year-over-year. Coetzee points out that while access to credit can be a powerful tool for building a financial future, it also poses risks if not managed carefully. The same report highlights that 33% of consumers intend to apply for a new personal loan in the next 12 months, indicating a growing reliance on credit to manage day-to-day expenses. Therefore, Coetzee says, understanding how to navigate this credit landscape is crucial to avoid falling into debt traps that can be obstacles to your financial goals. ALSO READ: 'Under pressure': South Africans struggling to keep up with debt repayments Coetzee has these five practical strategies for young people to stay out of the debt trap to keep in mind: 1: Understand the full cost of credit and debt 'Remember credit is not free money. Whether it is a credit card, clothing account, or personal loan, each comes with interest rates, initiation fees and service charges that can accumulate quickly.' For instance, a personal loan from a non-bank lender carries a delinquency rate of 40.6%, indicating higher risk and potential cost. Delinquency means if you do not pay. Before committing to any credit agreement, request a detailed breakdown of the total repayment amount and compare it to the cash price to understand the true cost and see if you can afford it. 2: Live within your means It is tempting to upgrade your lifestyle with your first pay and buy new gadgets, trendy clothes, a fancy car or go on more outings. However, Coetzee warns that succumbing to lifestyle inflation can lead to overreliance on credit. The TransUnion Consumer Pulse Study found that 52% of consumers have cut back on discretionary spending, indicating a need to prioritise essential expenses. Coetzee says it is a good idea to consider implementing the 50/30/20 rule, where you allocate 50% of your income to needs, 30% to wants and 20% to savings and debt repayments. ALSO READ: Leaving the nest? Here are 5 harsh financial truths to remember 3: Build and stick to a budget to avoid too much debt Budgeting empowers you to take control of your finances by providing a clear picture of your income and expenses. With the rising cost of living, many South Africans are turning to credit to manage expenses, but Coetzee says it is better to use budgeting tools or apps to track your spending and identify areas where you can cut back, to ensure you live within your means. 4: Keep an eye on your credit score Your credit score affects your ability to secure loans, rent an apartment and can even affect your employment opportunities. You are entitled to one free credit report every year, allowing you to monitor your financial health. Make sure that you regularly check your credit report to identify errors or signs of identity theft and take steps to improve your score by paying bills on time and reducing outstanding debts. ALSO READ: Debt Review: The good, the bad and the ugly 5: Get help with your debt before it is too late If you still find that you are struggling with debt, remember you are not alone. The National Credit Regulator reports that 18.1 million people applied for credit in the third quarter of 2024, a 3% increase from the previous quarter. Coetzee says you can reach out to organisations like FinFix for financial education workshops, one-on-one credit coaching and practical tools to help you manage and overcome debt. Empowering your financial future Credit, when used responsibly, can be a valuable asset in building your financial future. However, Coetzee says, mismanagement can lead to long-term debt and financial stress. 'By understanding the true cost of credit and monitoring your credit score, you can avoid the debt trap and achieve financial stability. Consider speaking to a registered financial adviser who can help you structure a plan tailored to your income, goals and debt profile.'
Yahoo
5 days ago
- Automotive
- Yahoo
Your Personal Credit Matters – How to Build It Before You Need It
Think your LLC protects you from credit checks? Think again—here's what lenders really look at and how to get your score ready before your next big move. Let's get one thing straight—your business credit is not separate from your personal credit, especially when you're just starting out. If you're running a small fleet or even one truck, every lender, leasing company, and equipment finance company is going to look at your personal FICO score first. They're not just betting on your business. They're betting on you. And if you're waiting until you need money to care about your personal credit, you're already too late. This article is about taking control—because in trucking, access to capital can make or break your next move. Whether it's adding a truck, covering a repair, or surviving a slow month, your personal credit profile is either a weapon or a weakness. Here's how small fleet owners can get their credit right before it ever becomes an emergency. Don't get fooled by the legal structure. Having an LLC doesn't mean lenders won't look at your personal score. In fact, until you've got 3–5 years of business financials and strong business credit reporting, your personal credit is the co-signer on everything. Whether it's a: Truck lease Line of credit Business credit card Equipment loan Fuel advance program …they're pulling your personal credit first. Your LLC might help protect liability, but it doesn't shield you from credit checks. And if your score's under 620, most lenders won't even finish the application. Let's break it down. These are the key areas every underwriter is reviewing: Credit score (FICO 8 or FICO Auto) – Most want 680+ to unlock the best terms Credit utilization – Keep it under 30%, ideally under 10% Payment history – Any late payments in the last 12 months hurt your profile Credit mix – Installment loans (auto, student) + revolving accounts (credit cards) Length of credit history – The longer, the better Derogatory marks – Collections, charge-offs, bankruptcies, tax liens Pull your real credit report—not just the Credit Karma version. Use and check all three bureaus (Equifax, Experian, TransUnion). That's what lenders are looking at. If your score is under 640, start here before you ever apply for business credit: Go through each line item on your report If anything looks wrong (wrong balance, duplicate account, incorrect late payment), dispute it directly with the bureau Focus on the card with the highest utilization first Bring each card under 30%, then under 10% Don't close cards—just lower the balance One missed payment drops your score 50–100 points Auto-pay removes the human error Don't apply for store cards, auto loans, or anything else unless it aligns with your trucking business Rebuilding takes 60–180 days to show results. But the earlier you start, the more leverage you'll have when it's time to grow. The best time to build credit is when you don't need it. Here's how to create a credit profile that's ready to work: Even if your business is new, most banks will offer a secured card with a personal guarantee. Use it to cover: Fuel Hotel stays Business subscriptions Pay it in full every month. This builds a positive history fast. Use vendors like Uline, Quill, and Grainger that report to Dun & Bradstreet and Experian Business. Pro tip: Don't just open the account. Use it. Pay it. Build the habit. Cards like WEX and Fuelman often report to both. Treat it like a credit card—stay under 30% usage and never miss a payment. How Good Credit Changes Your Trucking Strategy Here's what a 720+ personal credit score unlocks for you: Low-interest truck financing without massive down payments Business lines of credit to manage cash flow gaps Credit cards with 0% APR offers you can use to fund emergency repairs Approval for factoring lines with better terms Vendor accounts that reduce out-of-pocket costs It's not about borrowing to survive—it's about creating options so you can grow when the time is right. Too many fleet owners sabotage their credit out of habit. Avoid these traps: Co-signing for others – Their risk becomes yours Using personal cards for business expenses without tracking – This tanks utilization Paying late 'just this once' – One late hits harder than you think Maxing out cards to buy a truck – This lowers your score at the exact moment you need it high Discipline beats hustle when it comes to credit. Build slow. Use smart. Protect your score like it's part of your equipment—because it is. In trucking, cash isn't always king—credit is. Your ability to access working capital when rates drop, a truck breaks down, or opportunity knocks will make or break your long-term success. Don't wait until you're desperate to clean up your credit. Build it now. Use it strategically. And protect it like it's your CDL. Because the next time you walk into a bank, finance company, or dealership—they're not just looking at your MC number. They're looking at you. And if you've done the work, that's not a risk. It's a weapon. 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