When you get married, the last thing you are thinking about is how credit will affect your marriage. Your financial history doesn’t change when you tie the knot. Your history, whether good or bad, will remain the same as will your spouse’s.
No matter if your finances are perfect and you qualify for all the interest-free offers out there, your financial history will not be affected by your spouse’s years of neglect, divorce, or identity theft experiences. The act of getting married to your spouse will not automatically bring your score down. Even if you live in a community property state, taking the last name of your spouse won’t change anything.
Since your credit is attached to your Social Security number, you can’t give your spouse your financial history. Even if you change your name, your Social Security number will stay the same. This also means that your new name will not wipe out your prior history, your old name is just now considered an alias.
When you make your accounts joint accounts, both of your scores will be used as factors in the approval process. This is where joining your financial history can be a benefit. If your financial history is worse than your spouses, then your spouse’s good financial history can help raise your ability to get a loan. This can be advantageous if you have an existing loan with a high-interest rate. By adding your partner to the loan, you are pretty much reapplying for that loan and the existing terms will be refinanced.
Now, that also means your bad financial history will be bringing the overall chance of the joint account to enjoy the benefits of your spouse’s good financial history. In some instances, it is better to have the partner who has a great financial background to apply for the loan on their own, allowing you to achieve the best terms and interest rate.
As you and your spouse now pay on that account, the good payment record will be reported on both of your reports. This will now improve your less than stellar score. It may take time but having the spouse that is more financially responsible will ultimately fix that bad history.
If you plan ahead, combining your financial history can ultimately help your marriage. If your spouse has a good history, having you added as an authorized user to a credit card account will cause the account’s history to show up on your report. This can have an immediate positive effect on your financial history.
Keep in mind that if you open a joint account together, both of your histories will be reviewed, and you will both be held liable for the account. If only the spouse with a good history opens that account and lists the other spouse as an authorized user, the spouse with the good history will only be liable for the account and only their history reviewed.
Just remember that when you are sharing finances in marriage, you need to be proactive in maintaining a good financial history. Otherwise, the benefits of sharing finances as a married couple will be reversed.