Your credit score determines your overall financial life – that has been built with years of sheer hard work. So, if you are thinking what impact will the credit score of your spouse have on yours? then you are at the right place. Continue reading this interesting and informative write-up to find all about your future credit journey. Here we will discuss the effects your spouse’s credit score can have on your credit score and loan eligibility and other related queries.
1. Will The Credit Score of My Spouse Affect My Credit Score?
The answer to this question is no, it does not affect your credit score. However, if you take a joint loan then your spouse’s score can affect your loan eligibility and its terms. Taking financial decisions with your spouse is tricky plus sensitive at the same time. If your better-half’s credit score is strong, then it will have a positive impact on the loan application, and vice-versa.
2. Is It Mandatory to Apply Jointly for A Loan After Marriage?
No, it is not mandatory to apply jointly for a loan after marriage. You can apply individually for any loan. And the bank will not check the credit score of your spouse in such a case. However, joint applications may boost your chances of getting loan approval, and desirable loan amount/terms, if your credit score and that of your spouse are acceptable by the bank/NBFC.
3. Are Credit Scores Merged/Combined After Marriage?
No, there isn’t going to be any change in your credit score or that of your wife/husband after you tie the knot.
4. Should you and your spouse merge your financial accounts?
The very first financial step that both of you need to take is to merge your financial/credit accounts.
- Prepare tax returns (joint) easily.
- It is easier to keep the records.
But, do keep in mind –
- Your borrowing ability might be impacted jointly if either one of you misses the individual’s account payment.
- In case a payment is missed on the joint account, credit reports of both the partner’s credit scores will go down.
Note– Merging saving accounts will not impact your credit score.
5. Will Your Credit Scores Be Impacted If You Change Your Name?
Using the surname of your spouse after getting married will not impact your credit score. Your Credit Report may not bear the new name after marriage. The credit history and the credit report will remain the same.
Note – In case of a name change, it is recommended to notify existing lenders about your name change. Moreover, do update the name with financial accounts, banks, and credit cards.
6. Do You Have to Share Debts After Marriage?
You, as an individual, are not responsible for debts incurred by your partner before marriage. Simply put, either of you is not liable for the debts of the other individual. Even after marriage, you can continue paying unshared or individual debts.
If both of you co-sign a credit card, a loan, or a mortgage, then only you both are liable for these shared debts. If a partner passes away, the surviving partner is solely and wholly responsible for the debt payment.
7. How Can You Raise the Credit Scores with The Help of Your Partner?
Ask your better half to endorse you on ‘building your credit’.
Step 1 – Share credit scores with your partner.
Step 2 – Ask for his/her advice on improving it.
Step 3 – Have him/her cheer for you each time you improve the available credit or decrease the debt of your credit card.
· Apply for a joint credit card
This step will help grow your credit based on the good financial habits of your better half.
· Become a legitimate user of any one of the credit accounts of your partner
This will encourage you to do the necessary things for the good credit score of your better half. And this can help you in improving your score as well. Overall, it will be beneficial for both of you.
8. Can You Apply for a Joint Home Loan?
You can apply for a joint home loan if you and your better half are planning to buy a home.
What benefits will you enjoy?
- Female borrowers are eligible for concessions in interest rates.
- It provides an opportunity to receive independent tax advantages.
- You can share your debt.
Note that, the loan amount will be determined only after considering the credit scores of both of you. So, if anyone of you possesses a bad credit score, chances are that there are not going to be any concessions in interest rates or you can be deprived of some other benefits.
How Is Your Credit Score Determined?
Your credit score is determined based on the individual repayment patterns and credit history. Even if your spouse has an average/bad credit score, it does not essentially mean that you are going to receive bad/average deals on credit cards and loans.
Note – The eligibility of your loan will only be affected by the credit score of your spouse if you apply for a joint loan.
So, we can confer that the credit score of your spouse may or may not affect your chances of availing of a new line of credit. Though it does not have an impact on your score directly, the same may influence the financial decisions you both take. Thus, it is best to repair your credit scores before the wedding so that both remain sorted with their monetary actions.