Staying married to someone you cannot get along with is not an easy task. Neither is divorcing.
Divorces are complicated because you are unraveling your married life. The life you shared with your spouse suddenly becomes two separate lives, and having to split up property such as joint debt is especially complicated.
Many married couples share financial obligations, including joint credit cards, mortgages, auto loans, and other accounts. While these shared accounts may simplify finances during a marriage, they can create additional complications during a divorce. They can even cause one or both parties to suffer from a decreased credit score.
Even if a divorce decree states that one spouse will be responsible for a particular debt, creditors are not automatically bound by that agreement. If your name remains attached to a joint account after the divorce, you may still be legally responsible for the balance and any future payments.
For instance, if your former spouse is assigned responsibility for a shared credit card but begins missing payments, your credit may still be negatively affected if your name remains on the account. Late payments, high balances, and defaults can all appear on your credit report because creditors still consider you jointly responsible for the debt.
The same concerns can arise with cosigned loans or accounts where you were listed as an authorized user. As long as your Social Security number and financial information remain connected to the account, your former spouse’s financial decisions could continue to impact your credit scores and overall financial health. Fortunately, there are some ways to improve your credit score after separating joint accounts as part of a divorce.
Review Your Credit Reports
Start by obtaining copies of your credit reports from all three major credit bureaus. Carefully review them for joint accounts, incorrect balances, late payments, or debts that should no longer be associated with you. Disputing errors quickly can help prevent additional damage to your credit profile.
Pay Bills on Time
Payment history is one of the biggest factors affecting credit scores. Making every payment on time can gradually improve your credit over time. Setting up automatic payments or reminders may help avoid missed due dates.
Lower Credit Card Balances
High credit utilization can hurt your credit score. Try to pay down outstanding balances and avoid maxing out credit cards. Many financial experts recommend keeping balances below 30% of your available credit limit.
Establish Credit in Your Own Name
If most accounts during the marriage were shared, you may need to build an independent credit history. Opening a credit card or small loan in your own name and managing it responsibly can help improve your credit score.
Contact Us Today
Divorce means separating joint finances, which can be stressful. Since California is a community property state, it can also be difficult to understand what debts each person needs to repay.
Having the right legal help is important. Get the help you need from a Redwood City divorce lawyer from The Law Offices of Oliver Gutierrez. Need a Spanish-speaking lawyer? Se habla español. Call (650) 285-1673 or fill out the online form to schedule a consultation today.