Getting married does not directly affect your
Credit score, despite common misconceptions. Nevertheless,
There are changes related to marriage that may affect your credit score, such as opening
a new line of credit together, name change complications or add your spouse
as an authorized user in an account.
Go to this exciting new moment of life with the tools to stay financially healthy together. Our guide will break down the common changes related to marriage that may affect your credit score.
How your spouse's credit score affects you
After the wedding, you
and your spouse can start looking towards your next big financial milestone.
But what if your spouse has bad credit?
It only affects you
your spouse's credit history if you request joint credit lines. Is
It is important to remember when considering buying a house or how to pay
Of the debt.
If you and your spouse decide to get a credit line together, also known as a joint account, then the lender extracts both credit reports to make the loan decision. In this case, mismatched scores could affect your mortgage interest rates, credit limit and approval possibilities.
Example of how your spouse's credit affects you
Suppose you have
He maintained a solid track record of payments on time and a good FICO® score. Your spouse, in the
On the other hand, he had several late payments and is still working to repair his
With those short and tall
Combined scores are likely to offer you a loan at a higher level
interest rate than what they would have offered as an individual.
Here are other ways in which
The joint account could negatively affect your two credit scores:
- A payment is sent late
- The account is in default.
- You are late in payments
This is the indirect way in which marriage affects credit. It does not happen as a result of the act of getting married, but as a result of the two people taking financial actions together.
If one spouse has a better credit history than the other, the spouse with the best credit history may need to apply for new credit accounts individually until the other can improve their score. This increases your chances of getting better rates and loan terms.
5 common myths about marriage and your credit
Signing the wedding
The license does not automatically link your financial records. There are many
Common misconceptions about marriage and finances, especially when a spouse
It has a lot of debts or negative marks in its history.
These myths can cause a
A lot of unnecessary anxiety before the wedding day. It is important to work
Through these questions together to create a tangible financial plan.
Myth 1: Credit reports merge when you get married
It does not lose your financial identity when you get married, nor does it automatically merge with your spouse's credit report. Credit reports are identified by your social security number.
Even if you change your
name, your social security number remains the same. When it comes to finances, your
The credit report still reflects only your own credit activity when you get married, unless
It has joint credit lines.
Myth 2: Marriage reduces your credit score
Your credit score will be
It does not change with the act of marriage itself, although common spending habits
Surrounding a wedding can generate more debt.
For example, a recent study He discovered that 28 percent of American couples borrowed to pay for their wedding. Costs related to a wedding, such as a honeymoon and the payment of wedding-related activities, can also contribute to a higher expense.
Merging your expenses
Habits also take time. If a person is more conservative with saving while
the other uses a credit card daily, it may take time to find the balance.
All these actions can
lead to factors that reduce your credit score, such as high credit utilization
and even lost payments. The act of marriage itself, however, does not have a
direct impact on your credit score.
Myth 3: your credit history is deleted when your last changes
Changing your last name
Nor does it affect your financial identity. Your credit report will remain
Likewise, your new name will simply appear as an alias in your report.
However, you may encounter administrative problems if you do not inform the appropriate parties immediately. After changing your name, inform your creditors with the name change information. Some banks will require an official name change form and a marriage license. Contact your creditors to find out their name change requirements.
When your creditors
report your new name at the end of the next cycle, the three main credits
the offices automatically receive the new information and will list your new name
As an alias in your report.
To be sure, request a
Free credit report one month after the change to ensure all details reach each
Myth 4: your spouse's bad credit will hurt your credit scores
If you or your spouse
They are still working to improve bad credit habits, your score will not affect
yours at the moment you get married. Your score can only change when you start
Apply for joint accounts or loans.
Once approved for a
joint account, both are responsible for the health of the credit line. Maximize your credit limit or
Missing payments affect your scores.
Myth 5: You are automatically added as a joint user in your
The act of marriage does not automatically merge bank or credit accounts. To authorize your spouse on your account or open a new line of credit together, you should discuss it with your financial institution.
Couples can choose to merge accounts before marriage or remain financially independent of each other after marriage. Marriage alone does not automatically give both parties access to each other's accounts.
How a spouse can help improve your partner's score
There are some ways in which
You can combine finances that will benefit both credit scores. For example,
adding your spouse as an authorized user to an account can help improve the
lower of the two scores, in some circumstances.
Other couples choose to keep separate accounts but open a joint credit line for common purchases and bills. It is not necessary to make these changes at once: each couple must decide what is best for their own comfort.
One reason to add a spouse as an authorized user would be if one of the spouses does not have a long credit history or has a high credit utilization rate (the amount of credit available compared to the amount of credit used).
There are benefits when requesting a joint account. For example, if your spouse has little credit, adding it as an authorized user can help you improve your credit score faster and help you both qualify for a better interest rate.
For some, linking all
Financial accounts create a way to define and manage household budgets, giving
an easy way to track expenses and plan how they choose to direct their
That said, there is no single answer to this question and each couple chooses to manage their finances differently.
Are you responsible for your spouse's debt when
You get married?
In general, the debt accumulated before marriage remains the responsibility of each individual. The exception to this rule is, of course, if you opened a joint account, signed a loan or became an authorized user in your account. If both have credit card debts or student loans completely independent of each other before marriage, the liability does not change.
Debt and assets accumulated during your marriage are treated differently depending on where you live. Nine states of community property law Consider that most of the debts, assets and assets accumulated during the marriage belong equally to both parties.
All other states follow the rules of common law unless you legally indicate that you plan to share the debt, for example, if you include both names in the title of a house. Common law states that the assets and debts obtained in a marriage remain the sole responsibility of each individual in the marriage.
In case you need more clarification on the property laws of your state, we recommend that you consult a lawyer.
How marriage affects your credit report
While getting married
does nothing to your credit, the financial decisions you make as
couple can impact it. It is important to do some homework as part of your
Marriage planning, especially when it comes to protecting your credit.
As we mentioned earlier,
Be sure to check your credit reports after your name change for any
inconsistencies or errors. Errors in your credit report may affect your
Credit score and require removal as soon as possible.
These may include credit.
items that do not belong to you but appear in your report, fraudulent accounts
due to identity theft or incorrect personal information such as your social network
Lexington Law can help
It works to eliminate inaccurate negative elements from your report. Our team of
Credit report consultants can help guide you through this process. If you find
Any error in your credit report, contact us for a free and personalized consultation to see how we can help you.