On behalf of The Walters Law Group, Ltd. posted in Divorce on Tuesday, February 18, 2014.
Most Illinois readers understand that a good credit rating is an important financial tool and look for ways to improve it. Married couples probably wouldn’t consider divorce a good way to go about raising their scores; however, a survey taken by Credit.com indicates that, in some cases, ending a marriage might have a positive impact on a credit score.
The survey consisted of 526 divorced individuals with varied levels of income, age and education. Nearly 30 percent of those surveyed reported that, following their divorce, their credit scores increased a significant amount. The survey also discovered that 40 percent of the respondents said they had a higher credit score than their spouse when they got married, and an equal amount of responders said they were the ones who handled most of the financial affairs during the marriage. However, this fact reportedly didn’t correlate to post-divorce credit scores. Those who were making the decisions were just as likely to see an increase as the spouse who was less involved with the money.
Another interesting finding was that discussing money had no impact on the credit scores; those who achieved better credit scores were just as likely as people who experienced a drop to say they didn’t have a money discussion before the marriage. Other factors that impacted credit scores included whether or not credit card accounts were joint and whether or not the couple lived in a community property state.
Sometimes there are financial issues following a divorce. This can be especially true for a spouse that made significantly less money than his or her partner. However, sometimes settling large debts as a part of the divorce process can have a positive impact on the individual credit score. This can make renting or buying a new home easier, and it also can offer the individual loans and credit cards with a more competitive interest rate.
Source: Market Watch, “Want to boost your credit score? Get divorced“, Christine DiGangi, February 13, 2014