Erin Steiner writes about personal finance, relationships and a variety of other topics for a variety of websites.
It’s something most people don’t think about before getting married and putting their marriage services on credit: While it’s true that your and your spouse’s credit ratings will remain independent of each other after your wedding, it is also true that, once you are married, your credit ratings will both have an impact on your future finances.
Does it average out?
Remember: Once you’re married, banks and loan officers look at your household as a single financial unit. This means that both of your credit histories and scores are going to be taken into account when deciding whether or not you qualify for financing.
On the one hand, this is good. If you have excellent credit and your spouse doesn’t, you don’t have to worry about his lackadaisical approach to bill paying in the past will bring down your score. On the other hand, it could affect the interest rates you have to pay or the terms you have to agree to before you’ll be approved for loans or joint lines of credit. In some cases, even if one spouse’s credit is excellent, if the other spouse’s credit is terrible, their joint application will be denied. That denial could have an adverse affect on the better credit score (though probably not much…unless you two are applying for loans all over the place).
So – in that sense – yes, getting married can affect your ability to get a loan, provided that you are applying together. If you do get approved for a joint loan, you need to understand that how you handle this loan (or line of credit) will affect both of your credit scores in the future (source: Marriage and Credit, MyFico.com).
But don’t give up hope. Depending on what you’re trying to finance, your lender is likely to look beyond your credit score.
There’s still hope!
More and more, lenders are using a variety of information for determining a person (or couple)’s ability to repay a loan. Some are looking even at things like rent and utility payments and are doing deep investigations into a person’s credit history instead of simply relying upon a single credit score (source: “Auto Loans and New Ways of Approving Credit”).
Still – if you have wildly different credit scores, this probably means that you have wildly different approaches to money, credit and paying bills. You might want to spend some time going over your individual finances before you get married. If you’re not sure how to approach the subject independently, there is free couples counseling out there that will help you learn how to deal with these issues cooperatively.
Remember: Once you’re married, you have to decide whether or not you are going to join your finances. If you do decide to join those finances, this makes you both responsible for paying off all of the bills, both for joint marriage services expenses and any balances built up before the wedding.
Sometimes, the best thing you can do – if you are worried about your spouse’s credit truly affecting your ability to qualify for loans and other financing – is take care of and work to improve your credit before you get married. Work with your future spouse (both in those free couples counseling sessions and out) to develop good money habits like paying bills on time, saving for the future, etc. You can lead by example!