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Does My Spouse's Credit Affect My Ability to Get a Loan?
When you’re married, you and your partner may choose to combine your financial forces. But how does that change your ability to borrow? If your and your spouse’s credit scores and history vary significantly, will that make getting personal loans more difficult?
You still have your own credit score and history
Each of you is in control of your own credit. You will always have an individual credit report; being married doesn’t change that, even if you change your last name. If you change your last name, be sure to inform the credit bureaus and any banks or other financial institutions you work with. (Check out this article for more information on credit scores.)
But if you borrow together, it’s different
When you and your spouse jointly take on loans, credit cards, and lines of credit or co-sign other borrowing agreements, it matters. In such cases, if your spouse doesn’t have the greatest credit, this could decrease your chances of being approved for offers and securing lower rates and better terms.
However, if you co-borrow, one partner’s bad credit doesn’t have to be an obstacle. You just need a strategy when applying for credit or loans. For example, if you have the better credit score and are concerned about having your joint application rejected, you can apply for credit under your name instead and add your spouse later as an authorized user.
Be aware of certain state laws
Community property laws in the following states say that any debts or assets accrued during a marriage belong to both spouses: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.* Be sure to check on your state’s laws about shared debt.
Spouses can help each other build credit
No matter what, it’s essential that you discuss credit and get on the same page. After all, it helps if you are working toward the same financial goals. You may even find that it’s best to avoid mixing your credit for a while until your partner can raise their score. Here are a few ways you may be able to support your spouse as they improve their credit*:
• Help them understand credit better and use it more responsibly.
• Open a short-term joint credit account.
• If you need to borrow money, encourage them to apply for a secured loan to build credit.
A Lendmark loan expert can provide personalized loan options for you and your spouse. Stop by your local branch or connect with us online to find out more.