Marriage joins two lives together, but does it join credit scores? If you are soon-to-be wed, you probably have questions about how marriage will impact your finances. Keep the following facts in mind as you plan for the future. They will shine some light on the road ahead.
I’m newly married. Do my spouse and I share a credit score?
No. Your credit history is attached to your personal Social Security Number (SSN). Every consumer has their own credit reports and scores. Contrary to popular myth, spouses’ scores don’t merge after tying the knot. You may be Mr. and Mrs., but the credit bureaus still view you as separate individuals.
Can I use my spouse’s credit accounts?
Yes, though it’s not an automatic right. As a spouse, you may qualify to use your husband or wife’s credit accounts as an authorized user, a change only your spouse can make. Certain lenders allow newlyweds to sign on as a joint account holder as well. Talk to customer service about their policies. They will help you determine your options.
Does my personal account affect my spouse?
A personal account won’t directly affect your spouse’s credit score, but that doesn’t mean it won’t carry weight. Consider the following example:
Charlie and Ellie have been married for four years. Charlie has a personal credit card that he secretly uses to buy video games, expensive dinners and other miscellaneous items. His current balance is $7,800. When Charlie and Ellie apply for a joint loan, their application is denied because of Charlie’s poor credit. Although his spending did not hurt Ellie’s credit score, his dishonesty prevented the couple from taking an important financial step.
The moral: Secret spending and marriage don’t mix. Consider the impact of your actions on your marital finances and your spouse’s well-being.
How will my spouse’s credit affect mine?
Marriage is a subjective state, and how your credit is impacted depends on how you choose to live as a couple. We’ve talked about the importance of asking financial questions before marriage. If you’re already hitched, consider the following scenarios. They will help you understand the finer points of marital credit.
Kyle and Cara Porter are newlyweds. Although they are excited to begin their lives together, they don’t feel compelled to share their existing accounts. Kyle and Cara opt to keep their own credit cards and bank accounts. During the first few months of marriage, their credit remains separate.
After six months of marriage, the Porters decide to buy a house. They apply for a joint mortgage loan and sign up for new utility services together. Although their credit scores remain individual, they are both responsible for joint accounts. If the bills aren’t paid, both spouses will suffer.
After three years of marriage, the Porters decide to revise their budget. They apply for joint credit cards and a new auto loan. Cara has student loan debt and a higher credit utilization ratio, so she asks Kyle to apply for the auto loan alone to avoid damaging her credit. Although they both use the car, Kyle is legally responsible for the monthly payments.
The bottom line: Credit and marriage are fluid states, and it’s up to you to create a system that works. Talk to your spouse about credit repair, goals and budgeting. A joint plan will help you achieve joint success.