Set to get married? The new beginning may impact your credit score - here’s how

At the outset, it is vital to note that marriage — in itself — does not affect credit score. The credit scores are not based on marital status; however, it can indirectly influence your credit score in a number of ways especially when you share a credit card or open a joint bank account.

For instance, Ashish Mishra tends to make his credit card bills always on time. Soon after his marriage to Nisha, he gives an add-on card to her, who unknowingly misses to clear her credit card bills. Now since the card is issued in Ashish’s name, and not in Nisha’s name, missed payments will start reflecting badly in his credit score. 

Marriage impacts credit score in the following ways:

Joint accounts: If you decide to open a joint account with your spouse or co-sign a loan, these accounts will appear on credit reports of both the account holders.  

Your credit scores may get impacted by the activity on these joint accounts. For instance, late payments or high balances on joint accounts can affect both spouses' credit scores adversely.

Authorised user status: Adding the name of your spouse as a user on your credit card can impact both the credit scores of both users. 

The credit activity linked with the account, including payment history and credit utilization, can also affect the credit scores of both the primary account holder and the authorized user.

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Spouse’s credit history: Marriage may also indirectly affect your credit score in case your spouse’s credit history is quite different from yours. For instance, if your spouse has a higher credit score and you become joint account holders on their accounts, it could positively impact your credit score. 

On the other hand, if your spouse has a poor credit score or has a history of financial problems, it could jeopardise your ability to qualify for credit together or even impact your financial goals.

Financial management: Marital partnership generally involves shared financial responsibilities and decisions. How both of you manage finances together can impact your credit scores. 

For example, if your spouse and you work together to budget effectively, and clear the bills on time, and avoid piling up debt, it will definitely leave a good impact on the credit scores of both of you over a period of time.

So, it’s vital to communicate openly with your spouse about financial matters, including credit, debt, and financial goals. 

Frequently Asked Questions:

Does marriage affect the credit score directly?

It does not any direct impact as such unless you have shared financial transactions such as joint bank account.

In what scenario, a transaction reflects on the accounts of both the spouses?

When you open a joint account or co-sign a loan, the transaction will appear on the credit reports of both the account holders.

What is the impact of adding your spouse as an authorise user of credit card?

The credit activity linked with the account, including payment history and credit utilisation, can affect the credit scores of primary account holder as well as authorised user.

How does the credit history of spouse impact your credit score?

Marriage may indirectly affect your credit score when your spouse’s credit history is quite different from yours. For example, if your spouse has a very high credit score, it could positively impact your score when both of you decide to open a joint account.

How does joint financial management impact your credit score?

Marital partnership usually entails shared financial responsibilities as well as decisions. The way both of you manage finances together leaves a lasting impact on your credit scores.