Does Divorce Directly Lower Your Credit Score?
When California spouses get divorced, they may suffer damage to their credit scores. While divorce itself has no effect at all on credit scores, many of the things that happen as part of a separation might.
Understanding Joint Debt Responsibility in California
One of the main problems is that while a divorce decree may divide debts, creditors only care about whose name the debt is in. If both exes are supposed to pay down a debt and one does not do so, this will hurt the credit of the other person as well. A soon-to-be ex-spouse could also make purchases on a joint account and drive up the debt, and then refuse to pay any of it.
Financial Challenges and Credit Protection Steps for Exes
Harm to credit scores often happens disproportionately to women. One reason for this is that women tend to have lower incomes than men. They are also more likely to suffer financially after a divorce.
Steps to Protect Your Credit Score
However, there are steps exes can take to try to keep their credit scores up after a divorce:
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Remove authorized users: Take your ex off as an authorized user on all your individual accounts.
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Close joint accounts: Shut down shared credit cards to prevent new debt from being added.
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Retitle assets: Update the ownership documents on vehicles and property as necessary.
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Refinance property: If there is a shared home, it might be necessary to refinance in order to remove a spouse from the mortgage.
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Monitor your credit: Order copies of your credit reports and monitor them regularly for any unexpected activity.
Property Division and Support in California Community Property Law
In a community property state like California, marital assets are to be split equally. This means that even if one spouse does not work outside the home, that spouse is still entitled to half of all marital property.
A nonworking or lower-earning spouse may also be entitled to spousal support; although, this is usually temporary. A soon-to-be ex may want to work with an attorney to discuss options for dividing property and what arrangements might be appropriate.