Nancy L. Sponseller

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Divorces and credit scores

On behalf of Law Office of Nancy L. Sponseller posted on Tuesday, February 18, 2014.

Typically, during the course of a marriage, one spouse is in control of the finances, while the other plays a role in mutual decision making about any monetary issues. Some spouses choose to keep their finances separate, while others prefer to make joint decisions. Ohio residents may find it of interest to learn about recent statistics conducted by an online credit counseling company. More than 500 divorced individuals of all ages, income levels, locations and backgrounds were surveyed.

The conclusions were surprising as the couples seem to perceive each other’s scores differently. About 40 percent of those surveyed reported that their credit score was higher than their spouse’s ratings. Financially responsible individuals, however, seem to maintain their high scores during the marriage as well as after the union came to an end. Those who were minimally involved in the financial planning during the marriage had lower scores after the divorce.

Any future changes in the relationship may have to be considered when entering a marriage. Money matters are better discussed before the marriage as the dissolution of the relationship may affect the credit scores of both spouses should the union come to an end. Factors such as purchasing a home, obtaining a loan or opening joint accounts, may have a significant impact in the future. As the couple’s marriage ends in divorce, a well-designed financial plan can help reduce the conflict.

During the divorce process, certain past financial behavior of a spouse may come to light for the first time, which could have an effect not just on rebuilding a credit rating but also with respect to tax audits. An attorney with experience in divorce law may be able to take these factors into account in negotiating a comprehensive settlement agreement.

Source: Market Watch, “Want to boost your credit score? Get divorced“, Christine DiGangi, February 13, 2014