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Protecting Your Credit During Marriage

Protecting Your Credit During Marriage

Posted By Meyers Law Group, P.C. || 28-Mar-2013

When you marry the love of your life, there is so much more to consider than just living happily ever after. A marriage is a union of both souls and physical life: and this includes your credit history and debt. Depending on your financial state, it may be either beneficial or unwise to join your accounts during your marriage because if you have good credit, and yet your new partner has a poor history it can have an effect on you. First off, it is important to realize that when you get married in doesn't mean that your credit reports are automatically joined together. While many people may assume that marriage means the joining of everything under the sun, your credit report is specifically unique to your personal social security number and therefore separate from your spouse.

Essentially, no matter what your credit report is going to be a separate document than your spouse. However, when you get married your credit report will now show that you are connected to your spouse and the joint accounts you share. It will also reveal any accounts you open that has the other one listed as a cosigner, and also show that your spouse was added to an existing account.

In the event that you and your spouse choose to joint your credit accounts, which many married couples usually do; your spouse's bad credit may now affect you. Because of this it is good to know that when you are seeking lender approval or hoping to extend your credit limit, they will now see that you are accountable for your spouse's bad credit and you may be denied the extension, loan, etc. in some cases, an employer or landlord will also check your credit in order to make a decision to hire or allow you to live on their property.

There are both benefits and disadvantages to keeping your credit separate from your spouse or joining together. Having your own credit as a married person can limit the possibilities of getting approved for a mortgage, for example, because you do not have a high enough income or asset value to apply for the loan. Perhaps you and your spouse buy a new car, and your approved for the loan as an individual. While you would equally be responsible for the payments if you shared a joint account, if the loan is under your name and then your spouse drives away and never looks back after only your name being on the loan, it is complete your responsibility. If you chose to not make payments because they took the car, only your credit would be hurt; not theirs.

If you want to move a little closer to sharing an account, you may be able to have your spouse approved as an authorized user. This means that they have the right to use your money/credit, but they will not be accountable for the debt accrued. If you decide that you have full trust with your spouse and you want to share everything, then a joint account is the option for you; this means that they have both the power to use your credit and at the same time will be equally responsible for the debt. Consider these details in order to determine if sharing credit or not is best for the two of you:

  • If you think there is ever a chance you will want to have your spouse taken off of your credit, an authorized user is a better route and easier process to change from than a joint account
  • Your spouse's credit may not be affected if they just become an authorized user on your account as opposed to a joint holder
  • If you two decide to join accounts, your good history (or vice versa) will affect their credit, and if one of you has poor history it will negatively affect the other
  • Your credit score will only be affected (as an authorized user or joint holder) if your spouse uses the majority of your credit availability , if you keep the balance less than half there is little to worry about

Getting married is a huge decision, which is why it is encouraged to have full disclosure with your fiancée before you tie the knot. Understanding and planning ahead of time can save you both time and arguments in the future. In the event that you decide to divorce in the future, contact a divorce attorney in Long Island at the Meyers Law Group, today!