What happens to your credit reports and credit scores when you get married? There are all kinds of common misconceptions about merging reports and falling credit scores. Luckily, many of these myths aren’t true. Here are the five most common marriage and money myths, followed by a primer on how marriage can actually affect your credit.
1. Our Credit Reports Will Merge Together When We Get Married
This is probably the most common marriage myth. Credit reports are keyed off each person’s individual Social Security number. Since your Social Security numbers don’t merge together into one number when you get married, neither do your credit histories.
2. Marriage Will Lower My Credit Scores
Huge amounts of credit card debt from funding your wedding and your honeymoon may harm your credit scores, but the act of getting married will not. Nothing automatically changes on your credit reports when you get married, so nothing should impact your credit scores.
3. When I Change My Last Name, My Credit History is Erased
If you change your name after you are married and report this change to your creditors, you will see some updates to your existing credit reports. Along with your old name, your new name will be listed as an alias. You will not have to start from scratch with a new credit history. There may be a few inaccuracies on your report as this transition takes place, so it’s important to check your credit report frequently during this period. (You can also view your free credit report snapshot on Credit.com.)
4. My Spouse’s Poor Credit Will Hurt My Credit Scores
This is a common concern for couples about to get married. Fortunately, your spouse’s past credit history has no impact on your credit profile. Only when you open a joint account will any information be shared on both of your credit reports. However, when you want to buy a home together, your spouse’s negative credit history could impact your mortgage rates. You should work together to improve your sweetheart’s credit if you are planning for a major purchase.
5. I Will Automatically Become a Joint User on My Spouse’s Accounts
Marriage doesn’t automatically make you an authorized user or co-signer on your spouse’s accounts. If you wish to be added to your spouse’s credit cards, you will need to call the creditors with this request. Please note that being added as an authorized user may not automatically result in the account being factored into your credit score. You’ll want to ask your creditor if they report authorized users to the major credit reporting agencies. As for loan accounts, becoming a co-signer for a loan usually requires refinancing.
How Does Marriage Affect Credit?
Marriage may not directly affect your credit, but there are a few ways your new union can wind up affecting your personal credit scores. For instances, if you do elect to open a bunch of joint credit cards with your beloved, those accounts — and whether they’re in good standing or not — will appear on your credit reports and factor into your credit scores. Plus, as we alluded to earlier, there are ways your beloved’s bad credit can come back to haunt you.
Say, for instance, you need to apply for a mortgage together, since both incomes must be factored into your debt-to-income ratio for you to qualify. Mortgage lenders are going to pull both of your credit scores — and your spouse’s less-than-stellar standing is probably going to net you a higher rate than you yourself otherwise would have qualified for. The effects could then become cyclical: A higher mortgage could make it harder to make your other loan payments on-time or require you to revolve higher balances on your credit cards — which, yes, will hurt your credit. That’s why it’s important for married couples to be honest with each other about their credit standing and to work together to improve a partner’s bad credit score over-time.