How Credit History Can Predict Divorce

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A Kansas State University researcher (Sonya Britt, assistant professor of family studies and human services and program director of personal financial planning) discovered that couples who argue about money in the beginning stages of a relationship are the likely to get divorced. The study was originally published in Family Relations Journal in 2012 and looked at long-term data from over 4,500 couples. Research indicates that disagreements about finances result in negative forms of communication, such as yelling and defensiveness.

In addition, financial conflicts last longer than other kinds of arguments, and couples who have major credit card or automobile debt cite lower marital satisfaction than those who are not encumbered by such debts. One possible reason for this phenomenon is that financial issues carry a great deal of emotional weight.

Depending on a person’s upbringing and personal philosophies, he or she may have very different priorities regarding money than his or her spouse. For instance, some people believe that money should be used for status while others believe that money should be used for security. This fundamental difference in opinion could lead to significant marital conflict.

Relationship between Bad Credit and Divorce

Statistics also show that dishonesty about finances is widespread. For instance, eight out of ten women confess to removing price tags from items they have purchased before returning to their homes. Additionally, 32 percent of women admit to hiding purchases from their partners and 17 percent of men admit to the same.

Many divorced couples are surprised to find out that their former spouse had financial skeletons in his or her closet. For instance, one out of three people admit to lying to a spouse about his or her spending habits. Additionally, 13 percent of divorced individuals had significant amounts of debt, and almost 20 percent of those people had low credit scores.

There are gender differences in the kinds of purchases that individuals tend to hide. For example, men are more likely than women to hide dating site activity and alcohol purchases from their wives. Women are more likely than men to hide a varying number of purchases, such as clothing, gifts and music, from their husbands.

Financial Infidelity and Divorce

Many instances of financial infidelity may be an indicator of marital problems or an impending separation. Some suggest that individuals who have secret credit cards or hide money on a regular basis might be planning to leave the marriage. Furthermore, secrecy about finances may signal deeper issues within the marriage relationship. An estimated 60 percent of the population believes that financial infidelity is just as damaging to a relationship as sexual infidelity.

Some indicators of financial infidelity may include a sudden decrease in disposable income; failure to disclose additional income, which may come from a number of sources, such as raises or bonuses; mysterious charges on credit cards; and unexplained liquidation of high-valued assets, which may include the sale of a number of items, including coin collections, stocks, bonds or artwork. Additional indicators might be receipts or credit card or bank statements that show purchases for items that cannot be accounted for, such as a jewelry purchase that the spouse did not personally receive.

Proving Financial Infidelity

In the event that a marriage is headed for divorce and one spouse suspects the other of financial infidelity, there are ways to find evidence of such activities. Forensic accountants and other financial experts may find hidden bank accounts, purchases and other evidence. In addition, financial activities often leave traces that can prove that transactions occurred. These traces might include bank records, receipts and transaction records. In addition, many spouses leave other types of evidence of their financial activities. In order to uncover financial infidelity, the first step is to figure out where the money has gone. One place to look is at a spouse’s credit report. A credit report will list all credit card accounts in that person’s name, including secret credit card accounts.

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