For many Californians, the financial impact a divorce can have on their lives is their number one concern. Property division, for example, may leave them feeling like they got cheated out of the assets to which they felt entitled, and alimony and child support can take a monthly toll for years to come. Although each of these issues needs to be dealt with in its own fashion, there is another financial matter related to divorce that should be considered even before a petition is filed: one's credit.
An individual's credit score can play an important role in finding post-divorce stability. Those who choose to end their marriage may have to secure a new residence, either through renting or purchasing, and debts may need to be refinanced. A poor credit score can render finding suitable housing difficult, and it can cost an individual thousands of additional dollars in interest depending on the loans at hand.
So how does divorce connect to one's credit score? Although assets are divided during the marriage dissolution process, so, too, are debts. People often make the mistake of maintaining joint accounts with their ex-spouses, sometimes without knowing, which can put them at risk. For example, if Sarah has a joint account with Bill and Bill receives that account in the divorce, any payments that he misses will also negatively impact Sarah even though she has no control over the payment.
Therefore, those who are seeking divorce need to try to close out all joint accounts before doing so. Some creditors won't allow a joint account to be converted into an individually held account, but an individual can always close out an account and reapply on an individual basis. Those who would like more advice on how to best situate themselves for post-divorce success may want to speak with a legal professional to develop a legal strategy that works for them.