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Why a credit check is important in marriage

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By: Joy Mali
on 3rd Dec,2013

While marriage can be exciting, it can also be intimidating for a number of reasons and one of them is the topic of credit reports and scores.
Why a credit check is important in marriage

While marriage can be exciting, it can also be intimidating for a number of reasons and one of them is the topic of credit reports and scores. The most common example is when one partner has a not-so-perfect credit score due to unpaid or overdue credit card balances, missing student loan payments or even worse, bankruptcy. These financial liabilities can leave the other spouse or partner worrying whether this could affect a carefully and well-maintained credit score and credit report.

Here are some things you should know about your credit score, dating and marriage.

• Individual Credit Scores- First things first, getting married will not have a direct effect on each of your credit scores. You are not responsible for your spouse’s debts created prior to your marriage. When dating and especially if considering marriage, you should know your partner’s credit habits as his or her credit score may affect dating. Not in the sense that their score can affect your score, but it may raise some red flags if the poor credit is due to negligence. If on the other hand the bad credit score is because of extenuating circumstances, it may have no effect on your relationship at all.

It is often a good idea for both partners continue to keep separate accounts, though many couples opt for one joint account. Your credit scores will not be combined because credit reports are linked to an individual’s SS number. When you get married, your credit scores will not be averaged. Therefore, couples, married or not, shouldn’t be concerned about credit scores affecting dating or marriage.

• Joint Account- The act of opening a joint account which will be held in both of your names will not tarnish your good credit score even if the account appears on your credit reports unless it is mishandled. If you open up a new credit card and list your spouse with bad credit as an authorized user, be mindful of how he or she uses the card. If he or she uses it responsibly and pays the balance on time and in full, this will add more positive history to your credit reports and may benefit both of your credit scores. On the other hand, if your spouse continues to miss payments or spends up to the credit card limit, then the opposite could happen. His or her financial liabilities will also be your liabilities which may really hurt your good credit score.

• Separate Accounts- Spouses should continue keeping their individual credit cards and other financial accounts even after they get married—especially if the other spouse has really poor credit. Having separate accounts will help you maintain a good credit score provided that you are still managing yours in the way you did before you got married. Furthermore, other reasons why it is important to keep an active account of your own is because, having recent items in your credit report and a good credit score can help you individually qualify for a loan, in case you need one in the future and can increase your spouse’s chance of securing one in the event that he or she needs a co-signer.

• Mortgage- If you and your partner both work and decide to take out a mortgage, usually, you would have to use both of your names so that your incomes can be combined and increase your chances of getting approved. However, when your partner has poor credit, this will lessen your chances and may even increase the interest rate. Therefore, it is often recommended that the partner with the better credit score should be the only one to apply for the mortgage. The only drawback is, since your partner is not listed on the mortgage loan; paying the monthly payments on time and in full, will not help the credit score and credit history of your partner.

• Benefits- As mentioned earlier, marriage does not have a direct effect on credit scores. However, it is still important for both spouses to discuss their credit scores so they can arrive at a good financial plan for their future. If you have bad credit, you can benefit greatly if you let your spouse with good credit habits manage a jointly held account. His or her actions would help boost your score and improve your credit history. Once the both of you have good credit scores, you will be able to secure better terms and interest rates on loans and mortgages.

It is important to look at your credit reports before you get married as it is best for both partners to disclose their finances to each other during this time. The reason this step is important is because after marriage, there will be a lot of major adjustments, of the biggest of which is often money. When you and your partner know each other’s debts and financial liabilities, the both of you will be able to come up with a good plan for your financial future together. Aside from that, disclosing everything to one another builds trust and will enable you to have a partner who may help you overcome your past financial setbacks.

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