One of the common complaints we hear, from potential clients and from others, is that Party A ruined the credit score of Party B, and Party B feels he or she deserves some kind of justice as a result. While it is true that two married people can affect one another’s credit scores, the overall concept is a bit more complex than most people realize.
First, understand that your credit score is a risk assessment. The higher the score, the less risky you are in the eyes of lenders, such as banks, credit card companies, mortgage companies, etc. You build a credit score based on a few factors:
- How long you have been accruing credit
- How many companies make inquiries into your credit
- Your cumulative amount of debt in relation to how many lines of credit you have open, and how much credit is available to you
- Your payment history
- The types of credit you have
For many people, the accrual of credit starts long before they get married. Once the marriage is final, all of this credit and debt stays the same for the individual. In other words, if you have a credit score of 800 (excellent) and your spouse has a credit score of 400 (poor), those numbers will stay the same after you get married – until you start to accrue debts and credit together.
Your ex’s credit score does not affect yours, but his or her debts, do
When two people get married, they bring with them separate debts and assets: maybe he has student loans, or she has a car loan she has not yet paid off.
The same is true, in a way, of your credit score. If you and your spouse do not accrue any marital debts or assets, then your credit scores should remain the same. It is not as if, upon being married, your 800 and his or her 400 are combined and divided to give you each 600; that is not how it works.
However, it is virtually impossible for a couple not to accrue marital debts. If you take out a line of credit, get a joint credit card, buy a home or a car, or do anything together involving credit, then both of your credit scores will be affected.
Will I have to pay for my ex’s student loan in a divorce?
Tennessee is an equitable division state. This means that marital debts and assets are divide equitably between two divorcing spouses, not equally between two spouses. Realistically, you should not be required to pay off a debt accrued before you were married, but there could be exceptions to this rule. For example, let us say that your ex had $10,000 in student loans, and an interest rate of 6%. You and your spouse decided to pay the debt entirely by opening a home equity line of credit with an interest rate of 4%, because this would save you money.
That home equity line is in both of your names; therefore, any debts accrued would be considered marital property, not separate property. In this case, a judge may decide that the remaining balance on that line of credit should be split between both spouses.
How a divorce can affect your credit score
Unless your ex has run up massive bills that are jointly owned, his or her actions should not affect your credit score – but getting a divorce could. Many people have a hard time adjusting to a single income, which means they may use their credit cards more often, or open up additional lines of credit. This can and will affect your credit score overall. The same is true if you cannot make payments on the debts you already owe. Finally, if a judge orders your spouse to pay a debt that is jointly owned, and he or she does not, then your credit score could be affected.
Dealing with debt in a divorce is a complicated process. At Miller Upshaw Family Law, PLLC, we work to ensure that your assets and debts are divided in a way that is best for you. To work with one of our experienced Nashville divorce lawyers, please call 615-454-9899 or contact us to reserve a consultation.