Jun 01, 2022

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Married couple reviewing credit score on a tablet together.

As you and your partner-to-be forge a path into the future together, you’ll encounter a host of challenges, some that are fairly mundane and some with more serious implications.

It’s easy to get wrapped up in planning the fun parts of your joint future, like: Do we really need two blenders? Who gets us for Thanksgiving? Dogs, cats, plants, babies, or all of the above?

While all these details are important to the life you’re creating together, it’s also critical that you take stock of your individual financial histories and how they may affect your plans. And sooner or later, your credit scores will come into play. These may not be comfortable conversations, but they are essential to your happy future. And having those frank talks now may just prevent stress later.

Getting married does not affect your individual credit score, but either partner’s score can affect your shared applications for credit (like for a mortgage) and the debt you take on—and manage—together can affect your individual credit score.

By all means, savor the joys that come with dreaming about your shared future. But before you’re carried away by the fun stuff, figure out where each of you stand with credit and outstanding debt, so you can determine how to address any issues and set the stage for good financial health together.

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Understand your partner’s financial health, and be transparent about your own

If you’re like most people, your perspective on money has been shaped by a variety of factors, including family attitudes, direct personal experience with financial abundance or hardship, and even the economic climate when you came of age.

Your money mindset plays a key role in your spending habits, savings priorities, and decisions to take on debt. And as a single person, how you handled money was strictly your own business.

Whether or not you consistently paid bills on time, took out student loans or a mortgage, borrowed money to buy a car, or opened a credit card account, your track record managing credit, and the credit score you earned, affected only you.

Ditto for your partner. Just like a lot of other things that change when you join forces, the money landscape can change in important ways as you become a family.

Start by getting on the same page

In an ideal world, you’ve both built good credit and established positive financial habits. Or perhaps you’ve got some learning to do as you develop shared financial priorities. Either way, there’s no downside to getting on the same page about what marriage means for your credit.

As you make plans for your future together, set aside time to have a conversation about each other’s financial history and how each of you handles money, ideally in a quiet place. Take turns asking questions about your debt and financial goals, and try to listen without judgment.

It’s been widely reported that the #1 source of tension between married couples is financial stress. So even if this exercise feels uncomfortable initially, remind yourself that you’re setting an important foundation for your life together.

Marriage and debt: Getting married does not affect your individual credit score

If one of you comes into the marriage with overextended credit, here’s the good news: That person’s poor credit WON’T affect their partner’s individual credit score.

Your credit profile is strictly the product of your own financial activity. Even if you have some debt yourself, as long as you continue to make timely payments, keep paying down the amount you owe, and don’t open a new line of credit, your credit score should remain stable regardless of your partner’s situation.

Credit reporting agencies such as Experian, Equifax, and TransUnion will continue to determine your score on the basis of your payment history, amounts owed, your credit mix, and recent applications for new credit, just the way they did before you were married.

Even if your partner-to-be carries substantial debt, or has a patchy payment history, it will not reduce your personal credit score. Still, there are implications to understand.

Your individual credit scores can affect shared credit applications

As a couple embarks on life together, major purchases often follow.

Here’s where a less-than-stellar credit history can deliver unwelcome news: Either partner’s poor credit health can affect any accounts you apply for together. This could be a big deal if you plan to buy a new home, refinance a home in both of your names, purchase a car, or even open a joint line of credit.

In situations like these, the company providing the financing will apply a formula that factors in your collective income and total debt outstanding to arrive at a debt-to-income ratio, or DTI.

Your DTI—and your credit scores—carry tremendous weight in determining whether you’ll qualify for a loan, what type of loan you’ll qualify for, and what terms you’ll be offered. Simply put, even if you meet the lender’s DTI threshold, a low or mid-range credit score sends a caution signal and your loan will come with a higher interest rate.

On the other hand, if you fall comfortably under the lender’s DTI threshold and you bring strong credit scores to the table, you’ll qualify for the best interest rate, which could save you thousands of dollars in interest over the term of a major loan.

You can build better credit together, and separately

Let’s face it—unless you were both born yesterday, it’s not unusual for one or the other of you to have encountered financial challenges in the past.

If either one, or both, of you has a problematic credit history, it doesn’t mean you can’t make plans for major purchases in the future. The best strategy is to lay out steps together for how to pay down existing debt, and take action as soon as possible.

Part of the process might include pursuing financial education together: Learn about the factors that determine your credit score, and how your actions (even small ones) affect it. With a better understanding, you’ll be more motivated to manage what is within your control, like establishing a system to make payments on time and consistently chip away at outstanding debt.

You can’t improve your credit overnight. But once you’re committed, you’ll find momentum in each incremental improvement that brings you closer to that shared dream.

It’s important to develop a plan that’s reasonable for both of you. And what’s “reasonable” is different for every couple. The most important thing you can do is create a framework you can live with, so money doesn’t become a battleground.

Should you pay off your spouse’s debt?

Especially if one of you enjoys a solid financial position while the other struggles with debt, you might wonder whether it makes sense to pay off a partner’s debt and start with a clean slate.

The answer is maybe—and depends on a variety of factors.

First, what’s the nature of the debt, and how was it incurred? Creditors may view medical and student loan debt differently than consumer debt; if that’s the case, it may not have as big an effect on your credit position together. You may also be able to pursue debt consolidation at a lower interest rate, debt settlement, or even debt forgiveness in some situations.

Second, can you pay off the debt without wiping out your own emergency fund? It might be possible to do both. It’s always good to preserve financial peace of mind, which comes with having money in the bank.

The bottom line on marriage and debt

Understand your collective debt situation and make a plan sooner rather than later to address any issues.

While it might seem easier now (and less confrontational) to simply maintain your individual financial habits and hope for the best, that path of least resistance could end up costing you dearly in the future. You may have trouble qualifying for a mortgage on your dream home, or you’ll pay a higher interest rate.

To right the ship, a personal loan could be part of the solution. A personal loan is an installment loan with a set regular monthly payment, a fixed term, and fixed rate; and depending on your situation, the interest rate could be much lower than what you’ll pay on a credit card balance. As a result, a personal loan for debt consolidation could allow you to pay off debt much sooner than you would if you made only minimum monthly payments on a credit card account. And, it could save you hundreds, even thousands, of dollars in interest compared to higher interest debt.

Even if the picture isn’t perfect today, if you take small steps together, and do so consistently, you can make meaningful improvements over time, and you’ll be well on the road to those big dreams.

Interested in learning more about credit health?

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