Many married and unmarried couples are unaware of the impact of marriage on your credit score. I have seen this time and time again in which couples are afraid to make certain moves because of a few misconceptions. So let’s go over the most popular.
Do existing accounts merge together when you get married?
No. Account holders are separate and remain separate when marriage takes place. This is a common misconception because usually one of spouses make a last name change to the same as the other spouse, but that doesn’t join your accounts. Even if you make your spouse an authorized user on your accounts, they still aren’t technically liable to pay on the account.
Your social security numbers don’t automatically become one super number. You or your spouse can still open separate credit accounts while married.
The only accounts that are merged after marriages are accounts that you open as joint account holders.
2. Do student loans combine after marriage?
Nope. These are separate accounts as well. When applying jointly for something such as a mortgage thought, both parties student loan balances will be taken into consideration when calculating household debt and obligations.
3. Is it best to become authorized users on all accounts?
Yes.
Well, if your partner has had positive payment history. If they have blemishes on their lines of credit, when you become and authorized user, those blemishes become yours. However, if both spouses have been responsible with their credit card use by making on time payments and keeping the balance below 30%, becoming authorized users on the spouses accounts will help increase credit scores on both reports. Most credit card companies don’t charge to add authorized users. Be sure to check your credit card agreement before adding your spouse to make sure that you don’t accrue an additional fee.
4. How does co-signing affect married couples?
The same as a non-married couple or any joint applicant. Once both parties are on a loan agreement, they both will receive a positive or negative impact on their scores depending on how timely the payments are made. Do not co-sign on a loan to save a marriage. I repeat.
5. What if there are joint accounts & we separate or divorce?
If this unfortunate event takes place, be sure to discuss payment plans and options as the loan payments will impact the credit score on both reports. You will most likely want to work to dissolve all joint accounts after a divorce so that means closing join credit cards.
Only in rare cases will the courts separate the loans.
Keep in mind, you can refinance home and auto loans to get your spouse off the loan. Another way to dissolve the accounts is to sell the home or vehicle.
The Bottom Line
As you can see, there are a few ways marriage can affect your credit score and report. It is important to be aware of your mates financial situation and credit standing as soon as you start getting serious. There are many resources like MyFico and Credit Karma that can help with this.
Financial matters are one of the top causes for divorce. Make sure that you and your partner have the same spending language. If you don’t, keep lines of communication open and work to aligning your spending behaviors for the sake of achieving your family goals.
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Calvin Russell Jr is a Certified FICO Professional and the CEO & Founder of Simply Professional Credit Consultation. SP Credit Consultation has helped hundreds of people increase their credit scores, qualify for homes, cars, and lower interest rates with their personal, Step-By- Step Action Plans. Contact us today to learn more or email us at info@gosimplypro.com.
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