Credit reports do not indicate your marital status, nor will they include your spouse’s identity or any account they hold independently.  Therefore, if your partner has bad credit it doesn’t have to drag your credit score down.

 

However, your partner’s credit score could still cause financial challenges for the two of you, especially if you want to borrow a loan or open a credit card together.

 

Here are some things to consider:

 

  • If you have a joint credit account with your spouse, and he or she fails to make payments on-time, the late payments will appear on both of your credit reports and can lower your credit score.
  • Your spouse’s low credit score could impact your application for joint credit, such as a new car loan or a mortgage. The lender may consider the joint loan a risk, which could result in the loan being offered at a higher interest rate or with stricter borrowing terms.
  • Even if you aren’t late on a bill, a joint account can still hurt your credit score if the credit utilization is not optimally managed. Remember, the ideal balance shouldn’t be higher than 30% of the credit limit at any point in time.
  • Your spouse’s credit can also affect your credit if you are an authorized user on their credit cards.  If they failed to make on-time payments in the past, or keep high balances on that account, it could negatively affect your credit report and score – as all of the history associated with that account is imported into your credit report. 

Your spouse’s individual loans, credit cards, etc. that you have not signed for should not affect your credit score.

 

If you have questions or need guidance, THD can help. Give us a call at (800) 822-7120.

 

-Erik Kaplan

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