Your credit score rating isn’t affected automatically when you get married, in fact it needn’t be affected at all. There are particular circumstances however that could cause a drop in your credit score after tying the knot. Getting married is indeed truly wonderful; it would be a shame to see a union placed under unnecessary stress due to unforeseen financial circumstances. Make sure you and your spouse can get the credit you’ll need, when you need it, by protecting your credit score rating.
How to Make Sure Marriage Doesn’t Damage Your Credit Score Rating
Whenever you apply for a mortgage as a married person the credit histories of both parties will be considered by the lender. If either of the couple have any credit issues their ability to get a loan could suffer. Even if a loan is awarded they may be subject to higher interest rates. The lender will generally consult with a mortgage reporting company to find out the credit scores of those involved.
Mortgage companies combine the credit score rating of each spouse into a merged report. Basically they look for the average score of the two combined, and a bad score for one of the couple could result in a declined application. It is a good idea to contact a mortgage lender to first see if you even qualify. Even if you do qualify for a mortgage though, the amount you qualify for could be less, or you may be charged more interest, if there is a bad credit score involved.
All is not lost if one of the married couple have a bad credit score rating. Mortgage lenders also consider such things as how much collateral you have (savings, investments, property), your job history and income, and your general character. It is best not to rely on these things alone however, as a good credit score rating is the first thing they look at. If your spouse doesn’t have one, help them to establish one before applying for a major loan.
If Your Spouse Doesn’t Yet Have a Credit Score Rating
It is possible if you’re newly married that your spouse has no credit rating. To receive a credit rating you must have an account open and active for at least six months with each of the major credit reporting agencies. Adding your spouse as an authorized user is a good way to help them establish a credit history. Though the credit history of an authorized user is considered in the lending process, they are not responsible for repayment of the debt to any extent.
If you need your spouse to establish a credit history rather quickly, it might be better to add them as a joint user. As a joint holder your spouse will be equally responsible for any debt incurred on the accounts to which they are joined. The added responsibility will accelerate their receiving a credit score rating. Keep in mind that if one person doesn’t pay, the other is as equally responsible for the debt. This is a two edge sword that could make or break both credit scores.
In some states there are community property laws that view any accounts entered into during marriage as joint accounts. It doesn’t matter if the additional person is a joint user or an authorized user. If that is the case in your state your spouse could be responsible for debt even as an authorized user. If such is the case in your area, the only way to be removed as one of the parties responsible for the debt is by directly contacting the card issuer and negotiating to have your name removed. Failure to do so could seriously damage your credit score rating.
Ethel Wilson is a financial and credit specialist with 12 years experience in the banking, credit scores, and financial industry. She has advised countless clients on how to improve their credit score rating. She now shares the best of her credit score rating information as a contributor and editor of http://www.creditscoreresource.com