FICO stands for Fair Isaac Corporation, which is a company that determines credit scores for individuals. These credit scores are based on only the actions of the individual in terms of your payment history, the amount of money you owe, the length of your credit history, your applications for new credit and the types of credit you use. These scores range from 350 to 850.
Does Getting Married Change Your Credit Score?
No, who you are married to does not factor into your credit score. Your credit score will remain the same no matter who you marry and what their credit score is. If you were to keep your finances completely separate, your score would be unaffected by getting married.
How Does Getting Married Affect Your Creditworthiness?
Whenever you apply for a loan with your spouse, both of your credit histories will be considered. If you have a great FICO score, but your spouse has a very poor credit score, you may not be able to get good interest rates or even get a loan at all, so it is important that you discuss your finances with your spouse so there are no surprises when you apply for a loan together. This also applicable to any joint accounts that you open with your spouse, such as credit cards.
Effects of Joint Accounts
If you have a joint account with your spouse, the account will affect both of your credit reports. Even if you are making all of your payments on time, but your spouse is missing his or her credit scores, those late payments will appear on both of your credit records. Similarly, if you are both making payments on time on your joint accounts, that positive information will appear on both of your credit reports.
Should You Keep Your Own Accounts?
When you get married, it is a good idea to leave a few accounts like credit cards open in your name to preserve your individual credit history. If you only use credit in your spouse's name for several years, your credit score will deteriorate because there will be a large gap in your credit history. Even if you never get divorced, if your spouse dies, you will only have your own credit score to rely on if you need a loan or credit card in the future.
FICO Score Calculations
FICO scores are calculated based on your credit history report. The score is based 35 percent on how you've paid your bills, 30 percent on how much money you owe, 15 percent on how long your credit history is, 10 percent on the different types of credit you've used, and 10 percent on the applications you've submitted for new credit. Your recent credit is more important than events in the distant past.
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