Your credit score is often the ticket that will allow you to obtain a mortgage or a lease that you may need in order to buy a home or a vehicle. Without impressive credit, you may be at a loss as to how to obtain a new credit card or prove that you're a financially responsible. Credit scores are used in renting a home, applying for insurance.
Sometimes, when a couple gets married one comes with impressive credit while the other comes with a less-than-ideal score. If spouses choose to combine their accounts, then one spouse's credit can often influence the other. If you are the spouse with good credit then you will want to protect yourself and work hard to improve your spouse's credit rather than have his or her score bring you down.
It is important to remember that marriage does not mean a merged credit report. Many people mistakenly assume that a joint credit report is created when they get married. Instead, the fact is that a credit report and score is tied to a single Social Security number, so you and your spouse will both keep credit scores your entire marriage. Your credit scores will never indicate that you are married; though joint accounts can certain influence the figures.
When you get married, you can determine whether you want your spouse to be an authorized user on your credit account or he or she can be a joint account holder. I a person is an authorized user, he or she has the right to use the credit but is not liable for any debts. Joint account holders are responsible for debt, which can become complicated. Also, it is easier to remove an authorized user from an account than it is to remove a joint account holder, which can make things easier in the event of a divorce.
It is key to be aware of the fact that accounts that you and your spouse open jointly will influence your credit score and your credit score will also list accounts where you are named as cosigner. If your spouse has an existing account and becomes a joint account holder or an authorized user on the account, this will be also listed on your score. As a result, you may discover that your credit score can dwindle down as your spouse abuses the finances in the joint accounts connected with your name.
If you are concerned that your spouse's decisions could damage your future credit score, you can always apply for credit individually. This will only work if your individual income and assets are substantial enough to qualify. You will want to make sure that your income is substantial enough to apply for a large loan like a mortgage. While applying for credit individually may be your best option, there are still considerations. You and your spouse will both be responsible for paying a debt if you apply for credit jointly, but if you apply individually then the expense will be solely your responsibility.
This means, for example, that if you are married and you choose to divorce your spouse, you may have to take the full responsibility of a debt that you applied for financially. This doesn't mean that you will get to keep the item that is associated with the loan. Your spouse may take off with your brand new car, leaving you with a lease to pay and nothing to show for it in some circumstances.
If you choose to open new accounts jointly with your spouse, it may be wise to keep your individual accounts open as well. This will help you to have insurance in case you divorce and need finances that haven't been shared with your spouse. If you want more information about money matters in marriage and divorce, discuss your situation with a local family attorney.