Newlyweds: Joint credit or not?

A reader asked me whether or not her credit score would be impacted if she married someone with a very low credit score. She had excellent credit. I told her it depends upon whether or not she took out joint credit and bank accounts. Once you take joint accounts as a husband and wife, your credit scores do tend to meld.

If you're planning to get married and you have an excellent credit score and your fiance does not, you may want to keep your finances separate for awhile. You can each have your own savings account and open a joint checking account for paying the household bills. Determine in advance how much you each will contribute to the joint account each month, so you don't end up with fights later about someone not contributing enough.

If you're thinking of buying a house, the person with the excellent credit score is the one who should put in the application. Don't put your spouse or fiance as a co-borrower if they have a low credit score or you will end up with much higher interest rate. This could mean that you'll need to buy in a smaller house until your spouse or fiance gets his credit score up, but at least you won't ruin your own credit score or pay outrageous mortgage interest rates.Sometimes you may decide that it's worth it for your future spouse to file bankruptcy if his or her debts are beyond what he or she can reasonably pay off. If your future spouse does decide to do this, ask your future spouse to do it before the marriage to avoid tainting your own good credit reputation. Your spouse will have a negative mark on his or her credit report for seven to ten years, so you'll need to be ready to take out all credit for the marriage in your own name for at least four to five years. That's how long it will take for the credit score to rebuild to a decent level as long as your spouse pays bills on time after the bankruptcy.

You will need to check your credit report at least once a year to be sure none of your spouse's bad credit history creeps onto that report. If you see an account listed that is not one on which you are a co-borrower, ask to have it removed. A couple can avoid this problem if they each keep their own names after the marriage.

Lita Epstein is the author of more than 20 books including the "Complete Idiot's Guide to Improving Your Credit Score."
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