By Kristina Russo | American Express Credit Intel Freelance Contributor
5 Min Read | December 22, 2020 in Money
Couples in healthy marriages are twice as likely to discuss money issues daily or weekly as those who describe their marriage as “OK” or worse, according to a recent survey.1 Open communication about money matters turns out to be important to couples – and one particular issue, marriage and your credit score, is especially so.
Conversations about marriage and credit scores are important because those scores help guide many common decisions in a couple’s early life together – paying for a wedding, leasing an apartment or car, buying a house, or sharing a credit card, to name a few. But you may not know how to start that conversation if you don’t know what happens to your credit score when you get married. Here’s an FAQ with some conversation starters that can help inform your discussion.
Technically, marriage does not affect your credit score. Your score is yours, your spouse’s score is theirs. Those two scores never merge. There is no such thing as a “joint credit score.” Marrying someone with a better credit score does not automatically enhance yours, just as marrying someone with a lower credit score will not suddenly pull yours down.
Your personal credit and payment history remain yours. When you get married, your payment history and debts that existed before the marriage never co-mingle with those of your spouse.
Bankruptcies before marriage are treated the same way. Your credit score is not impacted if your spouse filed for bankruptcy before you were married.2 As a practical matter, a pre-marriage bankruptcy will likely impact your ability to qualify for future loans if you apply jointly, and it may put stress on your household budget if your spouse has a bankruptcy-related repayment plan that continues past your wedding date.
Your past history remains separate even if you live in one of the nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.3 In community property states, assets, income, and debts are automatically classified as being jointly owned – with a few exceptions – regardless of which spouse’s name is associated with it, but only if acquired during the marriage.
After the wedding, you can continue monitoring your own credit data since you and your spouse still are entitled to one free copy of each of your credit reports per year from each of the major credit bureaus – Equifax, Experian, and TransUnion.4
Credit scores are tied to Social Security numbers, not names. Changing your name has no impact on your credit score. If a spouse changes their name after marriage, you should alert all of your creditors after completing the name change with the Social Security Administration. The credit bureaus will update their records automatically by adding your new name to all previous names or aliases.5
Having many names on your credit report has no impact on your credit score. In fact, being comprehensive here helps ensure that all of your accounts are being tracked and also can help catch identity fraud.6
After marriage, many couples begin to apply for joint accounts, such as mortgages, leases, and bank accounts. Joint accounts make both parties fully responsible for the entire agreement. Because of this, lenders evaluate a couple’s combined income and both credit scores in their approval process. Interest rates and fees are typically influenced more by the lower of the two scores.7
The activity in joint accounts affects both spouses’ credit scores and becomes part of the credit history for every Social Security number on that account.8 Missed or late payments in joint accounts will have a negative effect on all scores, regardless of which person made the error.
Most credit card accounts are not true joint accounts. Instead, they have a primary account holder plus additional card members (aka authorized users). In these cases, only the primary account holder has control over the account and is liable for all the payments, but activity from every card member impacts both the primary user’s and authorized user’s credit scores.9
Married couples do not have to apply for credit together. You can apply for loans separately but are limited by your individual income and debt-to-income level. Ideally, a two-income couple with two good credit scores can maximize credit limits and minimize borrowing costs.
For couples who have a wide disparity between their credit scores, the higher scoring spouse can help raise their partner’s score by adding them to a credit card as an additional card member. If the card has a good payment history and credit utilization rates under 30%, this arrangement may help build up the lower credit score without damaging the higher one.10
If you haven’t yet set aside some time to discuss finances with your partner, it’s a good idea to start the conversation about building good financial habits together. That way you both keep your credit scores as high as possible.
When it comes to marriage and credit score, there are a few critical ideas to keep in mind: Getting married doesn’t affect your credit score. Neither does changing your name. Joint accounts will affect credit scores separately and equally, so discussing financial habits with your significant other is key. Finally, spouses also can take steps to help each other improve their individual credit scores.
1 “Money, Marriage, and Communication,” Dave Ramsey
2 “How does getting married affect your credit score?,” Bankrates
4 “Myths vs. Facts: Marriage and Credit,” Equifax
5 “What Happens to Your Credit When You Get Married?,” Experian
6 “How does getting married affect your credit score?,” Bankrate
7 “Here’s What Marriage Does and Doesn’t Do to Your Credit Score,” The Street
9 “The Pros and Cons of a Joint Credit Card,” Experian
10 “Does Getting Married Affect Your Credit?” NerdWallet