Getting married can impact many aspects of your life. Yet, the idea that marriage has a direct impact on your credit scores is a myth. And while the question posed by the title of this article may seem to have just been answered, there’s certainly more to this issue.
While the act of getting married isn’t meaningful to your credit scores, what you do after you get married certainly can affect your credit scores.
Marriage Doesn’t Affect Credit, But What You Do Afterward Can
The bottom line is that although you may (or may not) decide to merge your finances after you say “I do,” the credit bureaus do not merge your credit reports with your new spouse when you tie the knot. This means your credit scores won’t change simply because you got married. And, the fact that you’re married isn’t a part of your credit reports.
That said, there are numerous financial and credit decisions that you can make when you get married that can influence your credit scores for the positive or the negative. And, how you apply for credit after you get married can certainly impact the terms of any newly opened joint credit accounts.
Here’s a look at how the choices you make after marriage can affect your credit.
Co-signing With a Spouse Will Likely Affect Your Credit
Getting married absolutely does not mean you have to apply for joint credit with your new husband or wife in the future. And while opinions vary in this respect, I’ve always taken the position that it’s wise to remain as credit independent as possible.
Nonetheless, there are times when you may decide you want to co-sign for financing with your new spouse, and that decision can affect both of your credit reports and scores moving forward.
For example, you may consider applying for a joint loan when you want to borrow a large sum of money, such as a mortgage. If you and your spouse want to purchase a home, you may need both of your incomes on the loan application to qualify for a large enough loan to purchase the house you desire.
When you co-sign for a loan with your spouse, the underwriting process will include both applicants. That means your credit reports and scores and your spouse’s credit reports and scores will be equally influential. And if the loan is approved, the new account will typically appear on both of your credit reports, thus impacting both of your credit scores.
Whether you’re the primary borrower or the co-signer, the lender will see you as equally liable for the debt.
Other than needing two incomes to buy a house, there is no real reason to apply jointly for credit. You don’t need to jointly apply for a credit card, and most card issuers won’t even let you apply jointly. And if you need two incomes to qualify for a car loan then, respectfully, you’re likely buying too expensive of a car and should probably consider something less expensive.
The upside of joint credit applications is that on-time payments can help both of you establish and maintain a positive credit history over time, which is certainly helpful to your credit scores. But if you fall behind on payments, the late payments will likely damage your credit reports and scores, and the same goes for those of your spouse.
Changing Your Name Does Not Affect Your Credit Scores
If you change your name when you get married, the name on your credit report will eventually be updated by your creditors. But changes to your personal identifiable information (PII) won’t impact your credit scores. Scoring models don’t care what your name is, or what your name was.
Changing your last name won’t remove your previous credit history from your credit reports either. When you notify your creditor that your last name has changed, the credit bureaus (Experian, TransUnion, and Equifax) will update your name on your credit reports the next time your credit card issuer reports to the credit bureaus.
In most cases, both your former and current last names will appear on your credit reports after a name change.
If you’re concerned about a different name causing you to lose a record of your previous credit experiences, you have nothing to worry about. In addition to your name, credit reporting agencies use sophisticated matching logic that considers countless other variables to correlate accounts and other information to consumers.
There are literally thousands of connective permutations of information used by credit bureaus to associate consumers with information in their credit file databases. Simply changing a last name isn’t going to result in disassociation.
Making Your Spouse an Authorized User May Help Their Credit Scores
A decision that may affect your credit scores after you get married is deciding to become an authorized user on your spouse’s credit card, or vice versa. If your spouse adds you as an authorized user to their credit card, the account would likely show up on your credit reports with the three major credit bureaus at some point in the near future.
Any account that appears on your credit report has the potential to positively or negatively affect your credit scores. If you become an authorized user on a well-managed credit card, then your spouse’s previous credit history on the account could benefit your credit scores. If your spouse has a low credit card utilization ratio on the card and it’s fairly old, that’s even better.
But if your spouse adds you as an authorized user on a credit card with a history of late payments or a high credit utilization rate, that’s another matter. Being an authorized user on a poorly managed credit card could hurt your credit scores rather than help you.
On the other hand, if you have a credit card that you have managed wisely over the years, you could consider adding your spouse to that account. Doing so will likely be beneficial to your spouse from a credit score standpoint, especially if they have a thin credit file or newer accounts on their credit reports than you do.
Adding someone as an authorized user isn’t the same as jointly applying for credit. An authorized user is not liable for the debt associated with a credit card account. The authorized user is simply allowed to use a card issued to another person to make purchases.
It’s like having a credit card with training wheels and a safety net.
The Bottom Line
Getting married doesn’t have a direct impact on your credit scores or your credit reports. But, you and your new spouse need to continue to make wise financial and credit choices together after marriage because poor credit decisions can lead to collectively lower credit scores, which will make financing more expensive.