Survey Results: When Divorce Does Damage to Your Credit

It may be true that money can't buy you love, but money problems and miscommunication can definitely bring you heartache in a marriage. In fact, 59 percent of divorcees say finances played a role in the breakup of their marriage, and 20 percent said financial conflict was a significant factor in their divorce, according to our recent survey by Experian.

59 percent of divorcees say finances played a role in the breakup of their marriage

What's more, ending the marriage doesn't necessarily end the financial woes or emotional stress. When surveyed, respondents who recently went through a divorce lost or paid nearly $20,000 in cash and assets. Financial consequences were so severe that 40 percent of divorcees say they'll never remarry, and 73 percent say if they do, they'll only consider a partner with good credit.

The demographics of divorce and finances

The largest percentage of our survey respondents (31 percent) reported they'd been married one to five years, a quarter were married six to 10 years, and almost a quarter – 23 percent – had been married more than 15 years. Just 6 percent said their marriages lasted less than a year. Nearly half had minor children with their ex-spouse, while 36 percent had no children and 18 percent had children older than 18. A significant majority of 77 percent said they'd neither paid nor received spousal support.

Exchanging information before vows

While the relation between communicating about finances and the damage that inequitable money management can do to a marriage might seem obvious, our survey sheds light on when and how those breakdowns tended to occur for respondents.

Who earns more and who manages money?

More than half of those polled said they had been primarily responsible for the finances, yet just 46 percent considered themselves the primary financial manager in the marriage. Just under a third (31 percent) said they equally shared responsibility for their finances with their spouse, even though 26 percent said each partner earned similar incomes. Fourteen percent said their ex had primary responsibility for finances, and 28 percent tagged their former spouse as the in-house accountant. Additionally, a whopping 96 percent chose not sign a prenup prior to their marriage.

Who knew what and when?

As further evidence that a lack of communication about money can drive a wedge in relationships, the majority of respondents said that, prior to getting married, the only financial information they knew about their spouse was how much he or she earned. Nearly half didn't learn about their partner's bill-paying habits until after they were married.

Forty-seven percent didn't know their spouse's credit scores until marriage, 38 percent were unaware of retirement savings prior to the wedding, and 37 percent discovered their partner's long-term financial goals after exchanging vows. Interestingly, more people (42 percent) found out about their partner's student loan debt after getting divorced; just 37 percent knew how much their partner owed on student loans prior to getting married.

Ignorance isn't bliss for divorcees

Knowledge is power, and both sides knowing about each other's finances seems to correlate with couples staying together. Compared to married couples overall, divorcees were more likely to be less informed about their partner's finances before tying the knot.

Among married couples, 79 percent knew their partner's income before marriage, while just 53 percent of divorced people could say the same. Thirty-six percent more married people were aware of their mate's student loan debt prior to the wedding, and 30 percent more were aware of bill payment history. Married couples also outpaced divorcees in terms of knowledge about long-term financial goals (60 percent versus 28 percent), retirement savings (55 percent versus 25 percent) and credit scores (43 percent versus 31 percent).

However, just talking about money may not be enough. Forty percent of divorced people say they talked with their partners about finances on a monthly basis, while 24 percent did so annually and 21 percent weekly. Just 14 percent talked about finances less than once a year. The quality of communication may be even more important than the frequency.

Navigating finances during marriage

Since having essential financial information about a partner prior to marriage could help people better assess their financial compatibility, it may not be surprising to hear that 53 percent of surveyed divorcees said they were not financially compatible with their former spouses. Just a third considered themselves financially compatible with their exes.

Similarly, 59 percent said finances played a role in their decision to divorce, while 20 percent said it played a big role and 7 percent cited it as the primary reason for the divorce.

The blame game

When money played a big role in the divorce, most people blamed their former spouse. More than half (54 percent) said their ex spent too much money, and 41 percent blamed their partner for putting the couple into debt. Ten percent said their partner's stinginess was to blame for financial strife.

Unpleasant surprises

The truth will always emerge, and many divorcees felt surprised by what they learned of their partner's financial habits after getting married. Seventy-one percent of women said their mate's spending habits turned out to be different from what they expected, and 54 percent said they were surprised by their partner's financial situation.

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Negative credit impact

Although in theory combining incomes in marriage should create the opportunity to improve finances, that's not happening for everyone. In fact, 54 percent of women and 42 percent of men said their credit scores declined during marriage. Half of women and 37 percent of men feel their ex ruined their credit.

During marriage, credit can also be an issue. Nearly a third of those polled said their former spouse's credit score was a source of stress during the marriage, and just 35 percent of divorcees said they and their ex agreed on how to use credit as a couple.

My credit score was a source of stress23%22%24%
My former spouse's credit score was a source of stress32%26%36%

The financial aftermath of divorce

While divorcees may be more aware of the financial impact of dissolving their marriage after the fact, they're most concerned with how divorce will affect their personal relationships. Thirty-seven percent said losing their partner was the most painful part of divorce, while 32 percent felt the impact on their children was most hurtful. Just 12 percent cited the financial aspect as the worst thing about their divorce, though as we'll see, the financial impact is often significant.

Paying for divorce

Still, there's no denying that divorce can add significant financial burden. The average amount of financial loss reported by survey respondents was $19,922. A significant percentage of people incurred greater-than-average losses, with 23 percent reporting losses of $50,000 or more. Fifty-five percent incurred court costs associated with divorcing, 53 percent paid divorce attorneys, 21 percent paid for mediation, and 16 percent experienced costs for parent education classes. Real estate was also an expense for some, with 11 percent facing fees to record a deed and 10 percent paying to refinance a mortgage.

Enduring worries

Ending the marriage did not relieve financial worries for many. Half still worry about their finances after getting divorced, with concern highest among women, those whose spouse was the primary breadwinner, and parents. More than a third (34 percent) said their divorce financially ruined them, including women (38 percent), parents (40 percent) and those whose ex was the primary breadwinner.

Continued credit woes

For many, the damage done during the marriage continues to affect their credit after the divorce. More than half (56 percent) said their ex spent so much cash they couldn't afford to pay other creditors. Half reported their former partner accrued high credit card debt on joint credit cards. Nearly a quarter were affected by their partner defaulting on a joint loan, and 19 percent said things were so bad they filed for bankruptcy.

However, credit scores did eventually improve after divorce for many among those we surveyed. Nearly half (48 percent) said their credit has improved since splitting from their spouse, and 28 percent have held their ground against further decline. Just 20 percent said their credit had gotten worse.

The longest-term impacts of marriage-related credit problems may be more emotional than financial. Following divorce, 73 percent said it would be important for a future partner to have good credit. Seventy-eight percent of women and 77 percent of parents felt this way. Sadly, 39 percent said the financial losses from divorce were so bad they'd never consider getting married again.

Lessons learned?

Although many express regret about how they handled finances in their marriage, the things they regret show an indication they now know what went wrong — and are prepared to do better in the future. Fifty-nine percent said they regretted not being more financially independent in the marriage, while 49 percent said they wished they had saved more money.

According to data from the Centers for Disease Control and Prevention, divorce rates have been declining. In 2000, there were 8.2 divorces per every 1,000 people, and in 2014 there were 6.9 divorces per every 1,000 people. Still, many researchers say the often-said factoid that half of all marriages end in divorce rings true. Although people are marrying for the first time later in life, the divorce rate has increased for older Americans. When you consider that nearly a quarter of the divorcees in our survey ended their unions after 15 or more years, it's clear that no age group is immune from risk.

For a chance at long-term bliss, couples need to have frank and honest discussions about all aspects of their finances before taking their vows. With open financial communication lines throughout their marriage, they'll be able to work together to set budgets, decide how they will use credit and establish long-term financial goals for retirement and beyond, together.

Survey Methodology

The data points referenced in this report come from a study commissioned by, Inc., an Experian company, produced by research firm Edelman Intelligence and conducted as an online survey of n=500 adults nationwide who have been divorced in the last five. Interviewing took place from November 2- 15, 2016.

This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.

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