The Impact of Marrying Someone With Bad Credit

Will it hurt my credit score to marry someone with bad credit?  

This is a very common misconception. The quick answer to your question is no. Rest assured it will not harm or lower credit scores when you marry someone with less than perfect credit. There is no such thing as a merged credit report. After marriage, your credit report will remain yours and vice versa for your spouse. Think about it like this, you won’t share a social security number or birthdate when you get married, It’s the same with your credit.   

If you had a credit card or loan before you were married, the lender granted the account to you, the ownership doesn’t change. Therefore, lenders will continue to report the account’s activity to your credit report only. Likewise, credit problems such as collections, judgments, liens and bankruptcies will never jump from your spouse’s credit report to yours.

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There are however serious financial considerations to think about.  When you apply for credit as a couple, your spouses “dings” could cause roadblocks in your plans. For example, if you and your spouse apply for a home loan and you plan to get financing together the lender will take each of your credit histories, scores and financial situation into consideration. Your spouse’s poor credit will either result in high interest rates which will significantly increase the cost of the loan or prevent you from qualifying for the home loan all together.   

You could apply for the home loan on your own, the downfall to this is your spouse’s income won’t be factored in. The interest rate you get will more than likely be better however the loan amount may fall short of the home you want or need to buy.    

Also, keep in mind, if you open credit cards and other loans together, these are considered joint accounts which means they will be listed on each of your credit reports. The two of you will be considered equal partners and ownership and responsibility are considered shared. If one of you fails to pay the bill, the other is 100% responsible for making sure the bill is paid in full and on time. If you don’t, both of your credit reports will be hit with a late payment which will significantly damage both parties credit scores.   

There are things your fiancé can do to improve their scores and get in a better credit situation before you get married such as identifying what is causing the damage, develop a plan of action, review progress together regularly and consider making your spouse an authorized user on your good credit accounts. 

ReScore can assist you with all of these. 

1) Identify the Source of the Damage   

Speak to a professional that specializes in credit restoration. Look for a company who does not charge monthly fees, offers a free consultation, has a partnership with an attorney and only charges if –and when negatives items are removed from the credit report. If you chose to work with a professional, they will develop a plan of action for you and your spouse.   

2) Review Progress Together Regularly  

Sign up for monthly credit monitoring, this typically has a low monthly fee anywhere between $20.00 to $30.00 a month. We recommend using IdentityIQ.com.

3) Establish New Lines of Credit  

Your spouse could apply for a secured credit card. A secured credit card is an actual credit card that’s designed for someone who needs to establish or rebuild their credit. As the name implies, a secured credit card is a secured by the deposit amount the user puts down.  The limit is the full amount that was paid as a deposit. Typically, these cards have a $200 to $300 limit.  

4) Designate Your Spouse as an Authorized User on Your Good Credit Accounts   

If you have credit cards that are 12 months or older, have low balances (30% or below of the credit limit) and in good standing (no late payments) you could add your spouse as an authorized user. This will give instant positive credit history to your spouse’s credit report.  

5) Hire a Budget Coach  

Often, low credit scores develop because of poor budgeting and planning. Hiring a budget coach can help identify areas that could be improved upon and more importantly actually teach you or your spouse how to follow and maintain a budget.  A budget coach typically cost around $175 to $300.   

What to remember: Marrying a person with low credit scores won’t affect your own credit record or scoresYou and your spouse will continue to have separate credit reports the entire time you are married. However, any debt you take out jointly will be reported on both of you and your spouse’s credit reports. Identify the root of the problem and hire help if needed.   

 

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