Credit Score

Could Divorce Save Your Credit?

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People looking to improve their credit scores will explore a variety of strategies to do so — divorce isn’t usually among them.

Even so, a survey of divorced consumers showed that people often saw their credit scores improve after a split, with nearly 30% reporting what they considered a significant jump. The Credit.com Divorce and Credit survey collected responses from 526 divorced adults of varying age, income level, educational background and location. While not nationally representative, the results offer an interesting look at how personal finances play into and change after a divorce.

Marriage & Credit

While not everyone shares the details of their financial lives with their spouse, the survey sample shared some interesting insights into how couples perceive their credit scores and their partners’ scores. In every couple, you’d expect to see one person with a higher credit score and one with a lower score, but how couples perceive each other’s credit is quite different.

About 40% said they had higher credit scores than their spouse when they were married (7% said lower, 26% said about the same), and 40% identified themselves as the person who managed the couple’s finances during marriage (34% said they did it together, 21% said it was mostly their spouse, and 6% said they stayed out of money matters).

While those numbers suggest a sample made up of more financially conscious consumers, individuals’ financial roles during marriage didn’t seem to correlate to their post-divorce credit. Respondents who were in charge of money during marriage were just as likely to report an increase in credit scores after divorce as those who weren’t the financial decision-makers, and going into marriage with a better credit score than the spouse didn’t mean the respondent achieved better credit scores after divorce.

In fact, talking about money before marriage didn’t have much of an impact on credit scores, either. Those with better credit after divorce were just as likely as those whose scores dropped to say the couple didn’t discuss money matters before marriage, though they should have.

The combination of your credit depends on a few things when you get married: Do you open joint accounts, keep them separate or is one person in charge? Do you live in a state in which marriage has a bearing on financial responsibility? (For instance, in common property states, a wife can be held accountable for a mortgage opened in the husband’s name.) All those things factor into how your credit scores may change with your relationship status.

The biggest difference emerged in why the marriage dissolved: People whose credit scores dropped after divorce were more likely to say finances contributed to the issues than those whose credit scores improved. Among those whose credit scores fell, 7% said finances were the primary factor in the breakup, as opposed to 4% in the group who saw a credit boost. Similarly, about 41% of people who saw increases said money had nothing to do with divorce, while only 32% in the other group said so.

divorce-chartUnsurprisingly, people who have better credit scores now are much more satisfied with how they manage their credit than people whose scores are lower now.

If you’re not sure where your credit stands, it’s a good idea to get up to speed on it — regardless of marital status. Checking your credit reports is especially important to help you ensure that there aren’t any errors (and if there are, then you’ll want to take steps to correct them). Checking your credit scores, which you can do for free using Credit.com’s Credit Report Card, can also help you assess your standing, and determine what steps to take to build or maintain your credit.

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Image: Mizina

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