Q: I have fair credit 630-690 post deed in lieu of foreclosure. I would like to transfer a balance of $16,500 due to divorce. Can it be done with this type of credit rating?

A: It's possible, but it won't be easy, and it won't come cheap.

If your score settled into the low-to-mid 600s after you gave your house back to the bank, consider yourself lucky. Research from FICO indicates that a foreclosure or a short sale could have knocked another 60 to 100 points from your credit score. Still, lenders will see you as a significant risk, and you may have to lean on some existing banking relationships to refinance your credit card debt.

Instant approval credit card offers won't be of much use to you here, since you're so close to that adverse event on your credit history. The clock ticking on your divorce proceedings doesn't help matters much, but it could help you out with lenders if you can show that you're going to maintain financial stability after all the papers have been signed.

Stay loyal, even now

You can make a strong case to your existing credit card issuer that you'll need to renegotiate your current account because of the divorce, anyway. If you and your spouse were both cardholders, you must cancel your existing account or risk all kinds of potential chaos down the road.

Call the customer service number on the back of your credit card and ask to speak with someone in the account retention team. Let them know you'd like to remain a loyal customer after your divorce, and they may be able to cut you a deal.

Search for alternatives

If your current lender won't play ball, try to leverage your relationship with a bank where you hold a checking or savings account. I normally don't like to keep my primary credit card and checking account under the same roof for security reasons.

However, I'd break my own rule in this case, since you may need your bank to use your transaction history to offset the information from your credit report. Banks I've known to take this approach include:

  • Capital One
  • Bank of America
  • Wells Fargo
  • U.S. Bank

Check out your local credit union, as well. Leaning on a face-to-face relationship with a nonprofit that's willing to look at your overall situation should get you further than an automated credit card application system. Good luck!

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