When Good Credit Marries Bad -- How Your Spouse Affects Your Credit

If you're recently married or planning on getting married soon, it's important to know how your spouse affects your credit, and vice versa. A good credit score can get you far-not only does it make it easier to get loans and other lines of credit, but it also means you'll pay less over time for them. Developing a good credit score takes discipline and smart spending and credit habits, but it can also be ruined in a matter of months and take years to repair if damaged.

The following are some things to keep in mind regarding marriage and credit:

Your Credit Scores Don't Combine

When you get married, your credit reports and accounts stay separate; in fact, nothing about your credit score or report will change once you say "I do." Your spouse's credit history will not suddenly merge with yours, and your personal information will not appear on each other's reports. The main benefit to this is if your spouse has a lower credit score than you, it will not in any way affect your current credit score or report, and lenders will not know by pulling your report.

Your Spouse's Credit Affects Joint Accounts

While your credit scores do remain separate, if you apply for a line of credit and you want both names on the account, like a mortgage or credit card, the lender will pull both credit scores to determine eligibility and loan rates. If one spouse's credit is very poor even though the other's is good, there is a good chance the application will be denied altogether. When joint loans are approved and credit scores are both bad and good, the interest rate will almost always be higher than if the spouse with good credit had applied separately.

In cases where one spouse has very poor credit and the other spouse has good credit, it's not a bad idea to apply for loans separately if you can't wait for your spouse to raise his or her score. The advantages to this are better chances for approval and lower interest rates. One of the main disadvantages to applying for accounts separately is that only the applicant's income is taken into consideration. For large lines of credit like a home or vehicle, this means you probably won't qualify for as much as you would applying jointly.

You Can Raise Your Spouse’s Credit Score

If your spouse has bad credit, you can raise his or her score in a number of ways, including:

• Add your spouse as an authorized user. Adding your spouse as an authorized user to your card takes only a phone call. It allows him or her to use your card, and it also means the account's history will be reported on your spouse's credit report. A positive account can help raise his or her score.
• Apply for a joint line of credit. Even if your spouse has lower credit, applying for a joint line of credit can help raise his or her score as long as the account is paid on time and stays under the limit. The interest rate may be higher, but it's a good way to start improving a score quickly.

It's also important to understand the reason behind the poor score. If the score is the result of something out of your spouse's control, like a lengthy unemployment or divorce, then the score will naturally raise with time. However, if a bad score is the result of overspending, missed payments, and general bad money management, your spouse will need to learn better money management skills before combining accounts with you.

Whether you're marrying someone with a good credit score or bad, your score will not be affected simply through marriage. If your spouse has poor credit, with smart credit management and a little time, you can help your spouse raise his or her score without hurting yours.