Does marrying someone with bad credit affect my credit score?

By Nicola Sargeant AAA
A:

A credit rating is an assessment of an individual's creditworthiness. This evaluation is based on an individual's history of borrowing money and repaying debts. A person's income and availability of assets also affects the credit rating or score he or she receives. When an individual wishes to secure a mortgage or car loan, he or she must have a sufficient credit rating. If a person is unable to demonstrate an ability to repay debt, his or her request for a loan will be denied.

Married couples generally maintain two separate credit records and histories. However, if you decide to take out a loan with your spouse, all payment history from then on will be recorded on both credit reports. When creditors generate reports, they are required by law to report information on a joint account in both of the account holders' names. It is important, therefore, that couples discuss their financial positions before getting married. Being aware of your spouse's credit history can help to maintain a healthy financial position after marriage and reduce financial strain.

Once you get married, it is also imperative that each of you have your own separate checking accounts and credit cards. This way you will be able to sustain your own active credit record. If there are long periods during which you do not have any credit history, you will not be able to take out loans by yourself. Both you and your spouse should make sure that you pay your bills on time because late payments are the fastest and easiest way to destroy your credit rating.

Although your spouse's bad credit rating may not affect your individual credit score, if that person continues to be irresponsible about debt repayment, both of you may suffer if you maintain a joint account. However, there are several actions you can take to protect your credit rating. For example, do not sign joint agreements, limit authorized users and keep checking accounts separate. These recommendations will help you to keep control of your finances and preserve your good credit.

For further reading, see Revealing The Hidden Costs Of Weddings, The Importance Of Your Credit Rating, Consumer Credit Report: What's On It and How is my credit score calculated?

RELATED FAQS

  1. Why do some institutions (like American Express) allow you to go above your revolving ...

    Learn why institutions such as American Express and Visa allow exceeding revolving credit limits, and consider when this ...
  2. In what types of financial situations would credit spread risk be applied instead ...

    Find out when credit risk is realized as spread risk and when it is realized as default risk, and learn why market participants ...
  3. What factors are taken into account to quantify credit risk?

    Learn how probability of default, or PD; loss given default, or LGD; and exposure at default, or EAD, are used to help quantify ...
  4. Why do high profiting sales mitigate credit risk?

    Learn more about credit risk in loaning to individuals and businesses. Understand how credit risk is determined and the impact ...
RELATED TERMS
  1. Soft Inquiry

    A credit report check that does not affect an individual's credit ...
  2. Thin File

    A limited credit history which can make it difficult to get credit ...
  3. FAKO Score

    A derogatory term for a credit score that is not one of the FICO ...
  4. Adverse Credit History

    A track record of poor repayment history on one or more loans ...
  5. Charge-Off Rate (Credit Card)

    The percentage of consumers whose unpaid balances credit card ...
  6. Time-Barred Debt

    Money a consumer borrowed and didn’t repay but which is no longer ...

You May Also Like

Related Articles
  1. Credit & Loans

    Meet The Company Behind Your FICO Score

  2. Stock Analysis

    Is Prospect Capital Exposed To Elevated ...

  3. Stock Analysis

    How Visa Counts On Your Free-Spending ...

  4. Credit & Loans

    Fight Scams: Check Credit Card Accounts ...

  5. Stock Analysis

    What Do AA+ And AAA Credit Ratings Mean?

Trading Center