As we approach valentine’s day, one of the most popular days to propose, I tend to think about the potentials and pitfalls for couples that merge their credit.
To start, let’s dispel the myth that the mere act of getting married will affect your credit rating. It won’t. Nor will you automatically be responsible for all of the previous debts of your new spouse. Those charges made before the marriage will remain solely their responsibility.
And that’s where the assurances end.
Some states each partner in a married couple can keep their finances entirely seperate.
In a few states, community property states, look at the income (and debts) acrued during marriage as belonging equally to both partners. At the time of this writing, there are nine states which award commuinity property status to married couples
- Arizona
- California
- Idaho
- Louisiana
- Nevada
- New Mexico
- Texas
- Washington
- Wisconsin
In those states, you can’t help but merge your debt and credit profile.
Those are the far ends of the spectrum. On one end, you share everything. On the other end you share nothing. Most relationships fall somewhere in between.
When making a decision to stick together for better or for worse, too few couples consider better credit or worse credit as a potential circumstance. Money is the #1 reason that couples get a divorce, and in those cases, you want to make sure your credit score is protected.
It’s an old story, but it still exists today…
Jack and Diane get married. They both work and add to the household income. Jack applies for the credit cards, and gets extra cards in Diane’s name. Diane is responsible for paying the bills on time, every time. And shares in the financial burden. Then Jack dies. Suddenly Diane finds herself with no credit card, and no credit history…
You can’t automatically get added to someone’s credit report, even if you are married, and even in some cases if you have a card! See, credit reporting goes by social security number, not anything else. If a social security number is connected to a credit account, the owner of that social will find that account on their credit report. If no social security number is on the account, no reporting.
This is why it doesn’t matter what your new spouse’s credit history and score was before you got married. Your name isn’t on those accounts, and they won’t hurt your score.
But since you are getting married for better or worse, it’s still good to look for someone with better credit. There are two primary reasons
First, one partner’s bad credit could hurt your family’s chances of getting some major purchases like a house or car. If you want to own the property jointly, you’ll have to apply for financing jointly…and a bad credit history of one spouse could prevent you from qualifying for that loan.
Second, you can’t teach an old dog new tricks. If your new spouse was a deadbeat or compulsive shopper, they aren’t likely to change. If they paid their bills late, always spent more money then they had, and ran their credit cards up…you can expect those same attitudes to prevail after marriage.
Wishing you a better marriage and better credit,
Donna Fox
