Marriage and the Myth of Joint Credit
Does getting married affect your credit? After all, much of your life is combined during a marriage. But what really happens to your credit reports and credit scores when you tie the knot?
There are a number of misconceptions out there. So, if you’re discussing how your nuptials will impact you financially, don’t miss the list below. Have a look at a few common myths.
4 Joint Credit Myths
Whether you’re engaged or newlyweds, or have already celebrated a couple of anniversaries, it’s time to understand the truth about marriage and joint credit. Check out the myths below. It’s likely you’ve heard them before.
1. Once we’re married, our credit reports and scores will merge together as one.
False. The credit world isn’t nearly so romantic. This myth is widely accepted and has even been the source of heated discussions prior to a marriage. But your credit profile is yours. It’s reported based on your personal social security number. Your social security numbers don’t merge when you get hitched, right? Well, neither do your individual credit histories.
2. If my partner has a bad credit score, my score will be lower.
False. Nothing suddenly shifts on your credit profile when you get married. There are no bureau police watching you ride off into the sunset and then slapping you with marriage penalties. On the flip side, your credit won’t improve because you’ve married into the 700s-club.
Let’s be clear: Your spouse’s credit history will have no impact on your score. It’s only when you open joint accounts that information is passed onto both credit reports. That said, if you’re looking to purchase a home together, your husband’s or wife’s poor credit could impact mortgage rates. Perhaps this is how myth #2 surfaced in the first place.
3. We’ll automatically be joint credit users on all accounts.
False. Once again, nothing automatically changes after your big day. You won’t automatically become an authorized user on all your sweetie’s accounts. You won’t be an overnight co-signer. In fact, with credit cards, you’ll have to call your creditor directly to officially add your partner.
While you’re at it, you might ask if authorized users are even reported to the bureaus. In some cases, they’re not.
4. If my name changes, my credit history will be wiped out.
False. Report your new name to all of your creditors. But know this: You will not be required to start all over again. Your credit history stands. But as the name changes are made, keep a watchful eye out for possible inaccuracies. They happen all the time on reports, so be sure all items reporting actually belong to both your married name and your former “alias.”
So, Can Marriage Affect My Credit?
It certainly can. If you open joint accounts, work together to keep balances paid in full. Late payments and higher interest rates can add up quickly and damage both credit profiles. And if one partner does have poor credit, work together to make it better. Credit repair may be necessary if you don’t want to throw yourself into raising credit scores for years on end.
When buying a home together – a common goal and traditional milestone among couples – both credit scores matter. Mortgage lenders are required to examine both incomes and thus both credit utilization ratios. Aggressive, attorney-backed credit repair may be helpful to your new family, since opportunities and loan approval are often time-sensitive.