How Marriage Affects your Credit Score

I get this question frequently – “We are thinking about getting married, what’s that going to do to my credit?”

This is usually a concern when one person has good credit and their significant other has bad credit.
The good news is that marrying a person with bad credit doesn’t automatically drag down your credit score.

However, there are situations where it can become an issue, so you need to be careful.
If you and the bad credit person want to purchase something together and want to apply for a loan, be wary!

When applying for a loan jointly, the loan folks will pull up your credit report jointly. This means at this point, your credit history will be commingled with the other person. At that point forward, it is difficult to get them split apart.

If one person has good credit and the other person has bad credit, the loan should only be applied for by the person with the good credit.

Unfortunately, this means that only the salary and assets of the person applying for the loan will count for debt/income ration, work history, etc.

A person’s income and assets who isn’t on the loan – even a spouse – isn’t taken into account. It doesn’t matter if they will live at the same address or will be contributing to the household payments. They aren’t on the application, so they aren’t taken into consideration.
In a nutshell, until the person with bad credit straightens out their credit issues, don’t apply for anything jointly.

Another thing to look at is why the other person has bad credit. Money is usually the number one thing that couples fight about in a marriage. Before tying the knot, take a good, long, look at how the bad credit situation happened and make sure it’s a situation that you can live with now and down the road. Is it constant poor spending judgment and money management? Or a one time life event that put them in this situation? Not a romantic way to look at a relationship, but a very pertinent factor when looking at spending the rest of your life with someone.

Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial.

The opinions expressed in this material do not necessarily reflect the views of LPL Financial.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management, an independent investment advisor. Silver Key Wealth Management is separate entity from LPL financial.
Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, NJ, VA, TX.
Photo credit: Dennis Skley

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