THIS PAGE MAY CONTAIN AFFILIATE LINKS. MEANING WE RECEIVE COMMISSIONS FOR PURCHASES MADE THROUGH THOSE LINKS, AT NO COST TO YOU. PLEASE READ OUR DISCLOSURE FOR MORE INFO.
Credit Shout may collect a share of sales or other compensation from the links on this page.
Ideally, when you say your wedding vows, “Till ‘debt’ do us part” won’t be part of the equation. But it’s important to recognize that when you marry someone, their credit history can affect you.
While your spouse’s credit history won’t directly affect your credit score thanks to the Credit CARD Act, it will affect your ability to get a mortgage when you buy a house together, your interest rate, or even situations where a landlord requires a credit check before you can get an apartment.
High interest rates on revolving credit as a result of a bad credit score can also negatively impact your standard of living. That’s why it’s important, before you get married, to make a solid plan for managing credit together.
The good news is, it won’t affect you as much as it may have before the Credit CARD Act. The Financial Planning Association debunks some myths about marriage and credit. Here are some facts you may not know about managing credit after marriage.
Your spouse’s credit history and FICO credit score does NOT become part of yours when you marry. A spouse with a poor credit history will affect your interest rates and how much home you can purchase when you buy a home together, but, other than that, potential creditors will evaluate your credit history separate from your spouses if you keep separate accounts. A spouse with a negative credit history will not adversely affect your credit, except in the case of joint accounts.
Marriage does not change your credit score, for better or worse. The only piece of information likely to change on your credit report after you marry is your name — and only if you report the change. Credit reports go by social security number; your credit history doesn’t disappear. (Even if you wish it did!)
Being added as an authorized user to your spouse’s accounts may or may not affect your credit score. Looking to give your score a bump by latching on to your partner’s good credit history? Only if the lender reports authorized users to the credit reporting agencies will it help your own credit. Similarly, if the account holder defaults on an account in which you are an authorized user, (not a joint account), it may not affect your credit score. Neither will the debt on an account in which you are an authorized user affect your credit-to-debt ratio.
This brings us to the question: Should you combine credit card accounts when you marry? For convenience, you may wish to add each other to your accounts as authorized users. But do it so you can both use the cards, not to up your credit score. And be careful — if your partner charges up debt as an authorized user, you are still liable to pay for it. This probably won’t be a concern except in the event of divorce.
What about Joint Accounts? Joint accounts require both parties to qualify for the credit card. Card usage, including on-time payments, late payments, and the debt-to-available credit ratio affect both account holders’ credit scores and credit histories. And you are both responsible for the payments. Joint credit card accounts can be tricky to dissolve and split up in the case of divorce. Even if the court grants one party responsibility for making payments on that card, late payments will stick affect the other account holder with a joint account.
If, as a couple, you are working together to improve your credit scores to qualify for a better rate on a mortgage, joint accounts might be a good idea. But each party should make sure to maintain individual accounts in their own name, too. This way, in the event of a break-up, you’ll still have credit to your name and can continue to build, or re-build your credit history.
And in a worst-case scenario? Here are some more tips so you don’t drown in divorce debt.