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Prenup Question: Is There a ‘You Can Hurt My Heart, but You Can’t Hurt My Credit’ Clause?

Aug. 12, 2014
Credit Score, Personal Finance
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Marriage can be a bit of a gamble — statistically, you have about a 50/50 shot of it working out in the end. There’s plenty you can do to decrease your risk of divorce, but it’s still an unfortunate reality for many couples. If you’re tying the knot soon, or plan to in the future, you may consider a prenuptial agreement. But is there a clause to protect your credit? Here’s what you need to know!

What’s a prenuptial agreement?

A prenuptial agreement, or prenup, is an agreement entered into by two people who are getting married and want to set forth guidelines for the marriage. Most of the time, prenups are created in order to protect the assets of each party from the other party in the case of divorce. However, you can set other guidelines in the prenup, such as pretty crazy clauses about maximum weight of spouse (although I don’t recommend trying to get your S.O. to sign that) or restrictions on when family members can stay with the couple for an extended amount of time.

Along with some of the sillier clauses, you can put in more serious financial clauses, like those pertaining to credit. For instance, you can put in a clause that you both have to pull and share your credit reports and scores each year for accountability, create clauses based on what is and what isn’t acceptable to go into debt for, etc.

How would an ex-spouse hurt my credit?

While you will never share a credit score with a spouse, joint credit accounts with a spiteful or low-income spouse may hurt you in the event of a divorce. The judge may order your spouse to pay off certain credit accounts, but if your name is on the account and your S.O. chooses not to pay, your credit will suffer.

Because of this, it’s probably a good idea to have a prenuptial agreement with credit terms on it, but not to fully rely on it. A prenup is a legal document, but if your spouse is willing to deal with the consequences of non-payment or simply can’t make payments, it will fall to you to either make payments or allow your credit to drop.

Nerd note: Understand that your state laws will trump whatever is in your prenup. Look into whether your state is common law or community property to better navigate your credit rights upon divorce.

So what should I do to protect my credit then?

Besides maybe having credit clauses in your prenup to go over scores and reports and keep debt to a minimum, you should also keep your credit accounts separate. Go ahead and share everything else, but don’t open joint credit cards. They can be difficult to separate, and any credit account with your name on it can hurt your credit if it isn’t used properly.

That said, you can add your spouse as an authorized user on your account. This will give him access to spend on the card, but he won’t be able to make changes. In the event of divorce, call your issuer to remove the authorized user from your account. As the primary cardholder, you have the right to do so without the permission of the authorized user. Your authorized user can also remove himself if he’s so inclined, but it’s probably best to take care of this yourself.

Bottom line: You can put credit clauses in your prenuptial agreement, but they may be trumped by state laws or ignored by your ex-spouse. The best thing you can do is keep your credit accounts separate. If you’d like, add your spouse as an authorized user — that way, you can remove him at any time for any reason.

Unhappy couple image via Shutterstock