Couples need to have pre- and postmarital money and credit conversations wherein they openly discuss their views about credit; these conversations should continue throughout the marriage. Never assume you both think the same way about how to use and manage credit. One essential point to understand is that marriage in itself will neither help nor hurt your credit score. Instead, the smart credit moves you and your spouse make or fail to make before and during the marriage will affect your personal credit score.
Spouse's Credit History
Your spouse's individual credit history has no impact on your credit profile. However, each spouse should know the other's credit history and score. If a couple ever decides to combine their credit accounts, they have essentially created a credit partnership to go along with their marriage partnership. If one spouse cosigns for the other or becomes an authorized user on the other's credit card, both individuals' credit reports will affect that information. Thus, if the spouse who opened the credit card pays the account 30 days or more late, the authorized user's credit report will also take a late payment hit. Late payments remain on a credit report for seven years.
Marriage and Debt
Though many people think they know how much debt their spouse has, one can easily rack up debt unknowingly. Credit card debt is the easiest debt to hide; by the time your spouse finds out, the debt may have already spiraled out of control. If you are carrying too much credit card debt and secretly struggling to make the monthly payments, confess this to your spouse and ask for help before it harms your marriage and credit score. If you need help to bring your debt under control, seek the advice of a financial counselor. To find a counselor near you, visit the National Foundation For Credit Counseling website (see link in Resources section).
Marriage & Credit
If you or your spouse has a low credit score, make a decision on how you will handle credit applications---whether the spouse with the good credit score will apply for the loan or credit to get a lower interest rate, or you decide to apply jointly and accept higher interest rates to help improve the other spouse's credit score. Taking your shared goals into consideration, discuss in detail an appropriate strategy on which you both can agree. Visit the Federal Trade Commission's website for practical tips on building a better credit report.
Joint Accounts
If you and your spouse open a joint account to buy, for example, a house or car, both of your credit reports will reflect this information. With joint accounts, both spouses are responsible for making credit and loan payments. If the account becomes delinquent, the lender will attempt to collect from both spouses.
Credit Report Review
If your financial plans include opening joint accounts, the sooner you see what you may be up against, the more time you'll have to develop an appropriate credit management strategy. Each spouse can order one free credit report annually from Equifax, Experian and TransUnion by logging on annualcreditreport.com or calling 877- 322-8228 (see link in Resources section). When you receive your credit reports, review them carefully for accuracy.
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