Your Credit Score and Your Marriage
Your Credit Score and Your Marriage, When a couple first starts talking about marriage, they often discuss their hopes and dreams, how many children they want, and maybe even finances to some extent. Few couples, however, talk about their
respective credit scores. While it’s not the sexiest topic, your future spouse’s credit score could have a significant effect on the interest rate you receive when the two of you decide to buy a home in the future.
Aside from this, your significant other’s credit score is a good indicator of their financial habits, and could reflect a nasty habit of paying bills late, massive amounts of credit card debt, or even a past bankruptcy.
Down the road, issues like this have a tendency to come back to haunt you, and can put a serious strain on both your finances and your marriage. So before those wedding bells ring, you may want to talk about your credit and what it could mean for your future financial decisions together.
Does My Spouse’s Credit Score Affect Mine?
Contrary to what many people believe, your credit score does not combine with your spouse’s after you get married, according to MyFICO, the consumer website of the Fair Isaac Corp., the creator of the FICO score (the most frequently used credit score).
The two of you will continue to have the same credit score when married as you did when you were single.
However, this doesn’t mean that you can always rely on the person with the highest credit score when taking out loans, or that your spouse’s financial moves won’t ever affect your score.
Along with evaluating your joint income, mortgage lenders will consider both you and your spouse’s FICO scores when you apply for a home loan, MyFICO explains. Another instance where your spouse’s credit affects yours is in your joint accounts.
If you share credit card accounts with your spouse, and he or she maxes out those cards, maintains high balances on those cards, misses payments on those accounts, or makes other irresponsible financial decisions regarding your shared credit, it will affect your credit as well as theirs.
What Can I Do If My Spouse Has Bad Credit?
If you plan on taking out a loan, and your spouse has a bad credit score, your best options may be to see if you are eligible for the loan using only your income, or to simply wait until your spouse improves his or her score before pursuing the loan, according to Kiplinger’s Personal Finance.
Remember that even if you have a credit score above 800, it may not be as effective as it should be in landing you a low interest rate if your spouse has a credit score below 600. Many couples work together to improve the credit score of the person with bad credit.
This process starts with ordering a credit score report to find out your starting point, and making a concerted effort to correct any mistakes in the credit report, pay bills on time, and keep credit card balances low. Most married couples who watch their credit closely and take steps to improve it will see positive results over time.
Your Credit Score and Your Job
The fact that your credit report has the potential to negatively impact your ability to get a job is unfortunate for many people who are trying to get back on their feet financially.
After all, if you are trying to repair your credit after experiencing some financial setbacks, you probably need a steady income to do so. Then again, it’s more difficult to receive a steady income if the information on your credit reports keeps you from certain jobs in the first place!
Even so, this is the reality job-seekers face: it is perfectly legal in many states for employers to request your credit reports as part of the job screening process, provided you give permission to release the information, according to Forbes.com.
Employers consider a job applicant’s credit report because it can be a strong indicator of an applicant’s ability to make solid financial decisions, keep their commitments, and meet deadlines.
These qualities are particularly valuable for jobs in banking, accounting, or finance that involve handing other people’s money. In addition, the information on your credit report may also be valued in office management occupations that entail financial tasks. Source