What Marriage Means for Your Credit
While marriage can impact your finances in many ways, tying the knot doesn’t create a direct link between both of your credit reports or scores. But once you’re married, however, your spouse’s actions may have an indirect impact on your credit, and you may be able to work together to help each other build credit and save money.
Marriage Doesn’t Combine Your Credit Scores
Getting married doesn’t directly impact your credit reports or your credit scores, which are based on those reports. Your spouse’s credit history won’t be combined or added to your credit reports, just as your credit history won’t be added to their credit reports. Your credit reports don’t even indicate whether you’re married.
Marriage also won’t necessarily combine your debts, and you may both still be individually responsible for repaying the debt you brought into the marriage. Therefore, if your spouse falls behind on a bill and a late payment gets added to their credit history, your credit won’t get hurt.
The same is often true for debts taken out after you’re married. If one person takes out a loan or opens a credit card, it remains solely that person’s responsibility, and only appears on their credit. However, that’s not always the case.
If you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), both spouses may be legally obliged to repay a debt taken out by either spouse. Unpaid debts from a spouse in a community property state could hurt you if the bill goes unpaid for too long and the account is sent to collections, because the collection agency may report the unpaid account to the bureaus under both of your names.
But even in community property states, an account in good standing may only appear on the credit reports of the person whose name is on the contract. As a result, on-time payments might only help that person’s credit.
Married or Not, Joint Accounts Can Impact Both of You
One way getting married could lead to credit changes is if you’re both named in the contract. For example, many married couples jointly apply for a mortgage or auto loan as their combined income can make it easier to qualify. Or, the partner with better credit could cosign the other’s application.
But it’s the fact that you’re jointly responsible for the debt, not that you’re married, that leads the account to impact both of your credit histories and scores. The accounts and impact on your credit would be the same if you opened a joint account with a relative or friend rather than a spouse.
And, similar to how getting married doesn’t automatically combine your debts, divorce won’t necessarily separate the debts either. You may have a divorce decree telling one party to continue making payments on the joint account. But, if they don’t, the late payments could wind up on both of your credit reports.
You Should Strive to Manage Credit as a Team
While being married might not intertwine your credit right away, it could indirectly impact your credit. Especially if you manage the household’s finances together, you may both feel responsible for every bill—no matter whose name is on the contract.
For example, your spouse falling behind on an auto loan might lead you to step in and make the payments or take care of other expenses, which could limit your ability to pay the bills that are in your name.
Discussing money and finding a good arrangement with a spouse can be difficult as you each bring unique fears, desires, and habits into the mix. However, if you can work through the potentially tough conversations, you may find that you can work together to build each other’s credit and save money. Here are some ideas:
Become authorized users on each other's credit cards
When you become an authorized user on a credit card, the credit card may be reported to the credit bureaus in your name as well. Being added (or adding the other person) to a credit card that has a long history of on-time payments and a low or no balance could be a good idea. However, know that a late payment or high balances could then hurt both of your credit.
Compare loan offers
If you’re comfortable having a loan be in the other person’s name, compare loan offers from individual applications and a joint application. And shop multiple lenders until you find the best offer.
Look into consolidating credit card debt
Using an installment loan to pay off credit card debt could help you save money on interest and improve your credit scores. Consider if you, or your spouse, could benefit and who should take out the loan. If you can’t qualify for a low-rate installment loan or struggle with overspending on credit cards, look into using a debt management plan to consolidate your debts and save money.
In short, whoever has better credit can use their credit to help the other person save money, and once you both build up your credit, you can combine forces to get the best deals possible.
When in Doubt, Get Guidance From an Expert
If you or your spouse are struggling to create a budget or manage your credit, or you’re interested in taking a big step, like buying a home or paying off student loans, consider working with a trained credit counselor. Free and low-cost sessions can help you discover the best options based on your individual and mutual situations and goals. Having a third-party in the room can also help ease some of the tension from otherwise difficult money talks.