The truth about how marriage can affect your credit score

A couple analyzing their finances
A couple analyzing their finances

Most married people share living expenses, have a joint account, trade in their convertibles for a minibus, and even share a toothbrush! The big question is: will sharing everything affect your credit score? 

Well, according to TransUnion, our credit scores don’t suddenly merge. Even if your spouse has a negative credit history, it won’t initially affect your credit score in any way. 

So, when does your spouse’s credit rating start affecting yours? 

The consumer credit reporting agency says the changes only come after you’re married or you decide to jointly apply for credit products like loans or credit cards. “Credit providers will look at both of your incomes, which may make it easier to apply for loans. They will also look at both of your credit scores – and if one of you has a bad credit history, there’s a chance your application won’t be approved or they may charge a higher interest rate.” 

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What do you do when your spouse has a poor credit rating? 

If you and your spouse have different credit scores, this may affect any joint applications for credit and may even put a damper on the new renovation ideas that you have. In this case, says TransUnion, you will have to decide on who will handle applying for credit and loans. “Will the spouse with better credit score make the applications? Will you apply jointly and accept higher interest rates to improve the other spouse’s score? These are questions you have to ask, depending on your financial situation and priorities,” says the agency.

Does my marriage contract affect my credit rating? 

According to TransUnion, your marriage contract doesn’t affect your credit rating or how you are assessed for a loan, however, it does affect who is responsible for the debt. So, if you’re married in community of property, it means you and your partner are equally and fully responsible for any debts incurred while you’re married. “In other words, if you can’t pay your debts, your creditors can legally recover the money from your spouse. If you have an ante-nuptial contract, only the primary account holder is legally responsible for paying any debts,” says the consumer credit reporting agency. 

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If we have joint credit, how is this recorded at a credit bureau? 

A joint account is reflected on the credit records of both you and your spouse. “That information is kept on the joint account until it is settled: the type of account; the people responsible for the debt; your opening balance; your current balance; the number of instalments, instalment amount and repayment frequency; months in arrears and overdue balance,” says TransUnion.

What if we miss a joint credit payment? 

“If you default on a joint account payment, this information will reflect as a default or judgement on both of your credit records,” the agency explains. 

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What if I co-sign a contract for my spouse? 

“You need to be very clear on what you’re getting into, when you co-sign on a loan or a credit card, you take on legal responsibility for that account, and it appears as your obligation on your credit report,” TransUnion advises. 

If your spouse misses payments or dodges paying the loan, your credit reports will be affected – and the creditor may unfortunately require you to settle the debt. 

How do I take my name off a loan if our relationship ends? 

“Once the account is opened, it’s extremely difficult to remove a co-signer off the loan. The person keeping the account will need to show the bank that they are able to take over the loan, or close it, to end the co-signing agreement,” says TransUnion. 

Apparently not even a divorce decree will relieve you of your liability to the creditor, unless the creditor themselves releases you from that account. 

So, what can you do to protect yourself? 

According to the agency, if you have a joint loan or have co-signed on a loan, check your credit report regularly to see how the other person is maintaining the account. “That way, you can address any potential problems early to avoid an issue on your own credit rating down the line,” says TransUnion.

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