Most married people share living expenses, have a joint account, trade in their convertibles for a minibus, and even share a toothbrush! The big question is: will sharing everything affect your credit score?
Well, according to TransUnion, our credit scores don’t suddenly merge. Even if your spouse has a negative credit history, it won’t initially affect your credit score in any way.
So, when does your spouse’s credit rating start affecting yours?
The consumer credit reporting agency says the changes only come after you’re married or you decide to jointly apply for credit products like loans or credit cards. “Credit providers will look at both of your incomes, which may make it easier to apply for loans. They will also look at both of your credit scores – and if one of you has a bad credit history, there’s a chance your application won’t be approved or they may charge a higher interest rate.”
What do you do when your spouse has a poor credit rating?
If you and your spouse have different credit scores, this may affect any joint applications for credit and may even put a damper on the new renovation ideas that you have. In this case, says TransUnion, you will have to decide on who will handle applying for credit and loans. “Will the spouse with better credit score make the applications? Will you apply jointly and accept higher interest rates to improve the other spouse’s score? These are questions you have to ask, depending on your financial situation and priorities,” says the agency.
Does my marriage contract affect my credit rating?
According to TransUnion, your marriage contract doesn’t affect your credit rating or how you are assessed for a loan, however, it does affect who is responsible for the debt. So, if you’re married in community of property, it means you and your partner are equally and fully responsible for any debts incurred while you’re married.
“In other words, if you can’t pay your debts, your creditors can legally recover the money from your spouse. If you have an ante-nuptial contract, only the primary account holder is legally responsible for paying any debts,” says the consumer credit reporting agency. – W24