Marriage and Credit: How Marriage Affects Your Credit?

How Marriage Affects Your Credit

In several ways, marriage is a union between two adults who have complicated lives, goals, and finances. In a sense, each person’s financial habits, responsibilities, and problems become shared once vows are taken. Eventually, numerous issues and challenges arise because of this merger. However, many of those concerns may not be as serious as you expect.

Although your partner’s credit rating is important for the future of your lives together, the score may carry less weight than you think. While your spouse’s credit may be less than impressive on the big day, their credit profile doesn’t necessarily determine what’s possible.

The top 3 things to consider about credit before/after marriage

The following are considerations that you and your spouse should be sure to make before the wedding. Understanding these factors may help you both better manage the effects of your prenuptial credit scores.

  1. Credit reports don’t combine

Although a marriage requires a husband and wife to combine things like property, time, family, and money, credit reports don’t merge when you get married. Contrary to popular belief, your partner’s poor credit score is not contagious since you each retain your own social security numbers even after the marriage contract is signed. Continue monitoring your credit profile annually to ensure its health and have your partner do the same. A team effort is the best way to build family credit after the wedding.

  1. A name change isn’t a fresh start

Taking the last name of your spouse changes a lot of things and often requires lots of paperwork and documentation. However, it does not change the records made on your personal credit report nor does it affect your overall score. Although most creditors require you to update your name within their system to help keep your reports current, a name change won’t provide a blank slate. Informing creditors of a name change is used solely to prevent identity theft, fraud, and confusion.

NOTE: Your new name will be reported as an alias on your account. Your credit rating remains the same as it was before the wedding, even after community property is added to your report. However, if your name is not listed on joint accounts, any activity on it will stay off your credit profile even if you’re the spouse of the other account holder.

  1. Your spouse’s credit won’t help or hurt yours (Usually)

While getting married to someone with good credit may open many financial doors, it will not increase your own scores. On the same token, saying vows to a partner with a poor credit rating won’t decrease your scores either. Still, their unimpressive rating may make you the primary account holder on any lines of credit opened after the wedding.

Understanding joint accounts

Newlyweds typically join bank accounts and/or list their spouse on property titles to make bill pay easier and accumulating savings quicker. Remember, though, that opening up a joint account with your partner allows them to access all information pertaining to those accounts. In addition, each person’s personal credit data shows up on the other person’s report. Still, each spouse’s scores remain the same and stay separate. Essentially, your credit history won’t impact your spouse’s, but activity on joint accounts will.  

For example, if you open a joint credit card account with your spouse, both of your credit reports will show it and your scores will be affected according to the way you and your partner use it. Regardless of whether you’re the primary account holder or simply an authorized user on it, responsible spending can help keep your heads above water and prevent the need for credit repair. Keep in mind as well that saying vows does not get your spouse added as an authorized user to any of your accounts.

Carefully consider your new partner’s credit utilization habits before adding them to any of your accounts. Whoever is the owner of the existing line of credit in question is responsible for requesting their spouse become listed as an authorized user. Additionally, the account holder may need to have the loan refinanced or add a co-signer if their spouse has poor credit.

Tips for building credit as a couple

Since proper credit utilization by only one spouse will do nothing for the other partner, it’s important that you both act responsibly with your credit and find ways to build up your scores quickly. You can do so in numerous ways, but the following are the most popular and effective:

  1. Adding them as an authorized user on an account with a long, positive credit history
  2. Purchasing a seasoned tradeline from a reputable source and then having your spouse added to that account as an authorized user (if your credit history isn’t long or your credit score isn’t good)
  3. Getting a secured credit card and paying the balance in full on time each month
  4. Working with a credit repair company to delete inquiries, wipe off expired data, and dispute fraudulent activities

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Steven Millstein is a professional personal finance writer and contributor to many leading financial publications. His work has been mentioned in and linked to from The Bustle, The Huffington Post, Benzinga, Yahoo Finance and many other publications. He also has his own personal finance blog, Credit Zeal, where you can follow him.
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