What Happens To Your Credit When You Get Married?

How your credit score is affected by your marital status.

Marriage is surely the ties that bind, but it's not just two people coming together: It is finances, too - or at least it can be. Whether you like to admit it or not, joint purchases, such as a home, will affect both parties.

Most lenders will look at your joint income when approving you for loans.

Married in community of property

Marriage is an important commitment that involves two individuals uniting as one. Couples use the wealth they have acquired individually and combine it to create one significant resource pool. Often, these combined resources will be used to purchase a family home.

What happens with the property, though, if divorce is on the table? The rules regarding property division can be complicated. Depending on how your property is titled and who owns what portions of this shared estate, without a prenuptial agreement in place, often you don’t know exactly what will happen.

When married in community of property, your assets and liabilities will be split. Each party will be liable for half of any outstanding debt such as credit card bills, student loans, or medical bills that were incurred during the marriage period.

It would be best for individuals filing for divorce to discuss their situation with a professional before making decisions about property division during separation.

Your credit report and marriage

Joint accounts will reflect on both parties’ credit reports and affect both credit ratings. All information will reflect including the opening balance, instalments and any slow or late payments. As with personal credit or debt, any negative information or defaults will stay put, no matter who initiated them.

What happens if your spouse has a bad credit rating?

If your spouse has a poor credit rating, this may well affect your chances of accessing credit. Credit providers will generally look at both parties when making this decision. It is therefore important for both partners to maintain a good credit rating.

If you approach a bank for a loan for something like a house, they will work out how your personal DTI affects your likelihood of paying off the investment. Basically, it's an indication of whether or not you can manage both your debt and income over time.

Your credit score may get a small boost when you get married. In fact, some credit score models give people who are married a score boost of about 5 points. Why does this happen? The reason is that being married makes people more financially responsible. If you get married, you’re probably going to move in together and merge your finances. The more financially responsible you are, the better your credit score will be.

For more insights into your credit report, contact Credit Health.