According to the National Center for Health Statistics, there were 2.1 million marriages in the United States in 2018. Most people who get married don’t even think about what happens to their credit after they say “I do.”
But marriage will affect your credit score – for better or worse.
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Will your spouse’s debt become yours?
No. Any debt that your spouse brings to the marriage in his/her name is theirs, and paying it back is not your responsibility, regardless of marital status. It will not appear on your credit reports (and vice versa), and in the event of a divorce, creditors cannot go after you for debt solely in your partner’s name.
Your spouse will still be legally obligated to repay those debts, and if that doesn’t happen, your credit score will not decrease. However, it will still have an impact on your financial situation.
Will you have a joint credit score?
No, there is no such thing as a joint FICO credit score. Each individual retains their own score. However, having separate credit scores doesn’t mean that your spouse’s credit score isn’t important. Once you marry, your spouse’s credit habits can impact yours.
Your credit history remains independent
When you get married, nothing automatically changes on your credit reports, so the trip down the aisle shouldn’t impact your credit scores. But as soon as you apply for any joint credit or loan, your partner’s credit score will become linked to yours. This will affect the interest rates you’ll pay, and any late payments or defaults will also appear on your credit reports.
Your credit report will never be merged with your spouse’s credit report. It will always remain solely yours. It is linked to your Social Security number and personal information. Your credit will only be affected when you and your spouse open a joint account or line of credit, or you add your spouse as an authorized user to one of your accounts.
You don’t automatically share credit cards when you get married, and credit cards don’t automatically shift to belong to both partners.
Pro tip: Discussing financial goals with your spouse is vital to understanding how you will handle bank accounts and lenders and deal with bad credit if that’s a problem. Being open about the situation is the only way to start your marriage with a solid foundation.
Your future spouse’s credit score still matters
One thing to note is that if you have excellent credit and your spouse has poor credit, it will affect the prospect of getting a mortgage and the interest rate you’ll pay. There may be some workarounds where you can apply in one person’s name or buy a home before the marriage, but then you’ll only be able to factor in that single income on the loan application. Most states will then require you to add your spouse to the deed, which means some additional fees that may make refinancing a challenge.
5 ways marriage affects your credit
When you marry, nothing initially changes with your credit history, credit score or credit report. It is not until you apply for a joint account or joint credit card or a spouse is added as an authorized user that both spouses’ credit can impact each other.
If your new spouse has a bad credit score, it can and will affect your ability to borrow money for joint purchases, like a home loan or a new car. You’ll probably have to pay higher interest rates on those joint loans. It can also lead to marital strife: according to a survey from Ramsey Solutions, conflicts about money are the second leading cause of divorce in the U.S.
1. Joint accounts
Applying for any car loan or home mortgage with your spouse would link to your credit reports. If you both have good credit, there is no problem. If one of you has bad credit, then this could cause you to have higher interest rates on your loan account or be denied. In this instance, your partner’s credit habits will directly impact your credit. When two people create a joint account or if you are co-signing for someone, you are saying you will be financially responsible for the bill if the other person does not pay.
Joint checking or savings accounts are not directly reported to the credit bureaus, so simply opening one of these accounts with your spouse will not impact your credit score.
2. Applying for new credit
Applying for new credit or a joint credit card account will impact both credit reports. Joint credit could potentially help build credit or hurt each of your credit scores. If credit utilization is kept low and payments are made on time, your credit scores could improve. Your payment history can determine whether you and your spouse get approved or denied for any new credit.
3. Repayment history
Any credit card debt you had before marriage is still your responsibility, and if you have a late payment on this account, it will only affect your credit score. How much credit card debt you have can impact your spouse if you both are applying for joint credit and need lender approval using both your incomes.
Late payments will hurt any joint accounts you have with your spouse. It does not matter if one was supposed to pay and forgot since you are both responsible for the bill; anything that happens with it will reflect on both of you.
4. Credit utilization
If your spouse has used a large percentage of his/her available credit, that means their credit utilization is high. This is a key component of their credit score, and it means that you likely will have to pay higher interest rates for any joint loans you may need. However, adding new joint accounts (and not carrying a balance on them) can also help to lower credit utilization.
5. Debt-to-income ratio
A debt-to-income (DTI) ratio is the total percentage of your (or your spouse’s) gross monthly income that’s earmarked to paying off debt each month. DTI is used to determine your borrowing risk.
Because you’re combining two incomes, this number could improve after marriage. If one partner has a high DTI percentage and another partner has a low one, a joint loan application will use your combined income, and it could lower DTI enough that you qualify for a lower interest rate.
READ MORE: How to calculate debt-to-income ratio
Pro tip: Though no one ever wants to have this discussion, it’s essential to sit down with your partner before marriage to discuss debt: student loans, medical bills, credit cards, car payments – even alimony or child support, if applicable.
Couples should openly discuss wedding preparations and expenses as well. While the marriage will not immediately affect your credit score, any credit card debt from funding your wedding and honeymoon may harm your credit score.
Three things that won’t affect your credit after marriage
A few things will not impact your credit score at all after a trip down the aisle.
1. Name changes
Getting a new name is often part of marriage, but a name change will not affect your credit report. It is reported to the credit bureau and recorded that your new name is part of your credit profile.
2. Your spouse’s previous credit history and credit score
Your FICO score and previous credit history do not change after marriage. Your credit report will not be merged with your spouse’s because of your wedding. On the other hand, your spouse’s credit score does not impact yours until you apply for new credit together. You can obtain a free credit report from annualfreecreditreport.com
3. Student loans
Your student loans are still solely your responsibility once you get married, even if you live in a community property state. If your spouse decides to help you pay those, that is allowed, but they do not take over ownership of your student loans, and they are not liable for any debts that occurred before you were married.
Student loans and marriage can be a tough combination, especially for engaged or newlywed couples. Student loan payments can add extra stress and costs, making saving for your future together harder. One study from TD Bank found that 21% of student loan borrowers say they’ve delayed marriage due to student debt.
What to do before you get married
While discussing debt can be uncomfortable, both parties should be honest and open about debts before combining finances. Both you and your future spouse should obtain free copies of your credit report from all three credit bureaus (Equifax, Transunion, and Experian) during your engagement. Review each other’s reports. Talk with your spouse about your personal credit history and personal finance goals you both plan to have as a married couple. Be forthcoming with each other about past debt, current debt, and your individual and joint goals. Finances are a large part of a marriage, and you want to be sure that you and your partner are on the same page. Fiscal transparency can make or break a long-term relationship, so put everything on the table. This way, there are no surprises.
READ MORE: Debt consolidation loans for married couples
Pro tip: Talking about financial topics such as this prevents resentment and arguments over money, making it easier to merge finances once married. There can also be tax implications if both partners are high-wage earners.
The bottom line
Married or not, your credit is essential. It can affect where you live, your employment, and even essential utility services. Before you tie the knot, have a discussion with your partner to review credit scores, credit card debt, student loans or anything else that could be a factor.
