What Happens to Your Credit After You Get Married?

The decision to get married is a major one and can affect many areas in a person's life, including the financial areas. While getting married can and does affect credit, there are many myths and misconceptions regarding how. Below are some of the ways that marriage can have an impact on someone’s credit. This information can be used to protect a good credit score and for learning how a married couple can build credit.

The Impact of Marriage on Credit History

Let us start by getting one common myth out of the way. For the most part, getting married will have no effect on a couple's individual credit reports. Their credit reports will continue to be separate and will not merge as is widely believed. Credit reports are based on an individual's social security number, and this does not change after marriage. One marriage partner's credit report will not appear on that of their spouse or vice versa. If one spouse's credit history is negative, it will be impossible to tell simply by looking at the other's credit history. In other words, their credit history will neither worsen or improve based on that of their partner. This disproves the myth that one spouse’s bad credit score will make their partner’s score worse.

Another misconception has to do with a wife changing her name. The myth is that the new name comes with a new credit history and erases the old one. If a wife opts to take her husband's last name, this means that she will have a new name on her credit report. Her credit history from her maiden name will carry over to the new one.

Circumstances Where Marriage Can Affect Credit

Should a married couple make a joint application for a credit card or a loan, then both of their credit histories will play a role. The lender will look at both of their credit histories when evaluating them. If one has bad credit, then they may be turned down. Alternatively, their application may be approved; however, they may have to pay higher interest rates. If the one with the better credit score were to apply separately, their interest rates would be lower as a result. In such cases, it may be best for the spouse with good credit to apply for the loan or credit card individually. It is important to note that this is only a viable option if the spouse’s individual income and assets allow them to meet the loan qualifications.

Married couples often open joint accounts and those do affect both credit histories. If more than one person is added to an account, it will appear on each person's credit history. This means that the positive or negative history of one account holder on that account will be credited to the credit history of the other. The same thing happens when parents add children as authorized users on their credit cards or when people co-sign on loans for friends or relatives. The relationship is irrelevant, the important factors are the names listed on the account. Both people are committing to managing the account and therefore the account will show up on both their credit reports. One benefit is that if one spouse does not have a credit history at the time that they get married, adding them as a joint account holder may help them to establish one. Since the account appears on both credit reports, it will help with the independent qualification for credit; however, creditors and lenders will try to collect from both spouses should the account become delinquent.

It is important to note that adding a spouse as an authorized user on an account will not cause it to be factored into their credit score. Someone who is an authorized user and not an account holder is not responsible for paying back a debt.

Benefits of Individual Accounts

In the event that the couple gets a divorce, the joint account could be closed. Having individual accounts would allow each account holder to have open accounts in their own names. It is important that both spouses be in full agreement with regard to the opening of a joint account. Finances are the most common cause of strain on marriages and any appearance of secrecy with regard to opening accounts could start trouble.

Spouses Should Get Full Disclosure from Each Other

Couples should share their credit reports with each other before getting married. If a married couple has not yet reviewed their spouse’s credit report, they should do so as soon as possible. They can get free credit reports from the three major credit reporting bureaus. When looking at their spouse's report, they should pay special attention to things like:

  • High balances
  • Bankruptcies
  • Late payments
  • Unpaid student loans
  • Foreclosures

Protecting a Good Credit Score is Important

While bad credit can certainly be the result of extenuating circumstances like high medical bills, it is often a measure of an individual’s ability to manage debt. It is possible that a spouse with bad credit is showing that they have a history of making poor financial decisions. It is important that their partner think carefully about whether they are willing to entrust them with responsibility for the household's finances. They should consider the risk to their own good credit rating. One way to handle this situation is for the spouse with better credit to take over the finances until their partner shows that they have improved their debt-handling skills. Until the improvement is seen, they should not open any accounts jointly.