When getting married, there are so many joyful things to consider, from registering for gifts to picking your venue. You’ve probably got a lot on your mind. But after the ring is placed on your partner’s finger, reality can start to sink in as you wonder about your financial future together as a couple. Newly married people can quickly come to realize there are many unanswered questions for them waiting on the other side of the threshold. Sometimes people find that they either didn’t gather enough information about their partner’s financial history, or that their partner has been less than honest about their credit score. It’s hard to know what affect your partner’s poor credit will have on your future together without a little research.
Is My Partner’s Bad Credit Affecting My Score?
The short answer is no. Despite getting married to someone, the two of you still hold your own, independent credit scores. If your partner has taken out unsecured credit cards or loans and defaulted on them, those accounts only affect his or her credit score independently. This is great news, since it means you can put loans in your name if your partner’s credit is bad and vice versa.
However, it can hurt you if loans or accounts are shared, or have been taken out in both of your names. If you have co-signed on the accounts in question, you will definitely suffer repercussions from missed payments on your credit score. So, while past mistakes may not make a difference, future mistakes will.
Do I Have To List My Spouse On A Mortgage?
If you’re looking to acquire a loan to buy a home, you may be wondering how your spouse’s poor credit will affect your rates and payments. In some cases you may even wonder if you need to list him or her on the loan application at all. If you’re looking to use your spouse’s income as a means to pay your mortgage or loan, you will need to list them and provide details to your financial institution. If your spouse doesn’t have an income, or you’re not in need of their funds to make paymenTS each month, you may be able to avoid listing them as being involved on your loan. This will keep payments and interest rates as low as possible. In some states, mortgage loans taken out within a marriage are automatically considered joint obligations, and are treated as such when payments are missed. Before signing onto a mortgage or taking out a loan, ensure that you’ve researched the rules regarding mortgages and shared debts specific to your state of residence.
What About Our Kids?
A parent’s bad credit score won’t necessarily hurt your children…but it can cause a struggle when your child wants to start establishing his or her own credit or attend college. When you have good credit, it’s easier to apply for loans. When you child turns 18, he or will have no credit (which is better than bad credit, but still not nearly as good as good credit). A great way to build good credit while avoiding sky-high interest rates is to have a parent co-sign on a car loan, loan for college tuition, etc. but if you have bad credit, this might not be possible. So, you can more easily set your child up for success if you have good credit.