Will your spouse’s credit affect yours or vice versa?

12 AUGUST 2023

Starting the next chapter of life with that special someone comes with a few changes, including sharing some important things.Will your spouse’s credit affect yours or vice versaA stable financial future is one of them. Your credit functions as a key to unlock ways to reach your dreams, and when you’re married it’s crucial to make sure your credit scores stay in good standing.

What happens to my credit score when I marry?

When you marry your partner, your credit scores do not become one. And if your partner has a lower negative credit score than yours, it won’t bring yours down or lift it. Your credit score is only affected if you and your partner decide to apply for joint credit loans or cards.

This means that lenders will take into account both your incomes and credit scores, and if one of you has a lower credit score or a bad negative credit history, your application might not be approved or your terms won't be in your favour.

Your marriage contract doesn’t affect your credit rating or if you apply for a loan by yourself. But it does affect who is responsible for the debt. For example, if you or your partner are married in a community or property and can’t pay a loan back, either one of you is responsible for that debt. Lenders or creditors can legally recover the money needed from you or your spouse. However, if you have an ante-nuptial contract, only the primary loan or account holder is responsible for any debt incurred.

How do credit scores affect joint credit?

A joint credit account is credit that is reflected on the credit records of both you and your partner. Information kept on this account include; the type of account, the people responsible for the debt, opening and current balance, the number of instalments and instalment amount, the repayment frequency, how many months in arrears and overdue balance.

This is why it’s important to properly assess both your credit scores and credit histories before applying for joint credit. Decide who will apply for credit and loans, the spouse with the better credit score or together to improve a lower credit score.

If a payment is missed on a joint credit payment or defaulted, it will show up on both your credit records. Before taking out a joint credit account, make sure that payments are manageable.

How does co-signing affect my credit score?

Co-signing a loan means taking legal responsibility for that account, and therefore shows up on your credit report. If you co-sign a contract for your spouse and your spouse misses a payment, your credit score will be negatively affected and you will be responsible for settling the debt.

Once you’ve signed onto the loan and it’s opened, it’s not easy to take your name off the loan. Whoever is keeping the loan will need to prove to the bank that they can manage the account on their own, or close the account.

How do I protect myself from my spouse’s bad credit?

  • Assess the problem Review your credit histories and reports before you make any financial decisions. Discuss what could have led to a lower credit score and how you can work together to avoid it in the future.
  • Communication is important Whether you're planning to open a joint account or keep financials separate, make sure you’re talking to each other about money.
  • Fix it together Plan on how you will address the problem. Either by paying off accounts or setting up a payment schedule to avoid missing payments. Work on reaching a credit utilization rate of 30%, by reducing credit card balances etc. Your partner can always reach out to a financial professional for assistance and advice.
  • Track progress Keep an eye on your credit scores by reviewing your credit reports every few months so you can make changes where necessary.
  • Consider other options Sometimes a joint account might not be a good decision, so there are other options. A secured credit card can help build a good credit score without adding another spouse.

Credit scores are important financial indicators to help you reach those dreams. When you marry, your own credit score isn't affected unless you apply jointly for credit. Before you do so, make sure your credit scores are up to scratch and that repayments can be made on time. Or both your credit scores will be affected.