Marriage and Credit

January 4, 2012 by  Filed under: Credit 

Getting married is a very exciting time; planning the wedding, picking your honeymoon location, buying a house or family car. While all of this can be fun, exciting, and sometimes frustrating, you may want to think about what this means for you and your spouse’s credit scores. There are a few things that all newlyweds should take into account when talking about finances and credit for their new lives.

The first thing you need to know is that your scores will not combine in any way. In other words, whatever your score was before you got married, it’s the same after you got married. Your personal score will not go up or down by marrying someone with a perfect or bad credit score. So, for example, you have perfect excellent credit, but your fiancé or spouse has a horrible score. Well, they will still have that terrible score, and yours will still look shiny and pretty to lenders.

So, what does this mean when it comes time to buy a house, car, or to take out a loan? There are a few ways you can go about doing this in order to help keep or raise you or your spouse’s credit. You can always co-sign for the loan or mortgage, but this has a few draw backs. When co-signing for a loan, your credit score may go down depending on how low the other’s score is. It also then makes you responsible for any debt that may occur, which of course would bring down anyone’s credit to a sad score. Instead, another option would be for whoever has the high score to apply for the loan on their own. If a lender approves the application, then the spouse with the low score can then work on fixing their credit so that in the future both of you can apply for a loan.

Perhaps all you want to do is put your spouse on your credit card. You can ask the bank to make them an authorized user for that account. This allows them to use the credit card but doesn’t make them responsible for any debt that may occur. Doing this can help raise their score, however, if there are any late payments then it would go onto your report and stay there for seven years, lowering your credit score. If that seems like too much of a risk, you can ask the bank to make them a joint holder for that card, which in turn, makes them as responsible for any debt as you are. Becoming a joint holder for a credit card will go onto that person’s report and will show in their score. If neither of those sounds like good options, you can simply keep your cards apart, like with a loan, and give them a chance to boost their score on their own.

Starting a new life with the person you love is always a fun and joyous occasion. Just remember that when you apply for a loan or credit card together, lenders will take into account both of your scores to determine whether or not you will be approved. If there is doubt about what to do when applying for a loan or credit card, you can talk to a credit counselor, or a trusted financial advisor to see what the best method may be to raise you or your spouse’s score, or to apply for a loan or card.

Sarah Manchester
Credit Scores
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