It’s vitally important to understand how marriage can affect your credit score. It’s often lost in the excitement of the moment and the thrill in combining lives with one another. When you get married, your credit scores (or reports) won't merge with your spouse. Joint accounts you share may appear on both of your credit reports, but your credit history will remain independent.
My wife and I started with no money to our names at 19. 10-years later, by the age of 29, we enjoy credit scores above 800. We've achieved an excellent credit score while raising 3 kids, going from $0 income to $150k+, earning 5 degrees with no student loan debt, and more in just 10-years.
My most recent credit score when we bought our current house in June of 2020:
Credit Score Groups:
Very Good: 720 - 749
Good: 680 - 719
Poor: 620 - 679
Very Poor: 619 & Below
Worst: No Credit
How We Achieved an 800+ Credit Score
My first loan was Kayla’s engagement ring when we were 19 years old. It was $1,500. I was working at a roller skating rink prior to leaving for basic training and I still can’t believe they approved me for it.
Over the past 10-years, we have only had two credit cards; one for cashback rewards and one to earn travel miles. Any purchases over $100 are put on the credit card and the card is paid off as soon as it posted to our account.
In addition to credit cards, we took out two auto loans and paid them off in full. One for $10,000 and the other for $15,000. Auto loans were not one of our best financial decisions, but it helped us build a more robust credit history.
We’ve never missed a payment on any debt or bill… Ever! Always having combined finances and open communication has been the biggest key to success for our family.
Why Credit Scores Matter
Credit scores are risk-analysis tools that lenders use to help them anticipate how likely you are to repay your loan on time. Having good credit is important because it determines whether you'll qualify for a loan.
Bad Credit is Worse than No Credit
No credit is not an ideal situation to be in, but one that we have all experienced. It’s often misunderstood that no credit is WORSE than bad credit, but that simply isn’t true.
While you may be treated as if you have bad credit, no credit means you’re starting from scratch. It’s much easier to build credit than it is to repair credit. It’s in your best interest to get started building your credit if you plan on applying for loans and mortgages in the future.
Benefits of Excellent Credit
Your credit score is your financial resume and regardless of what some financial gurus may say, average people should care about their credit score.
Here are a few key benefits to having an excellent credit score:
Access to more competitive interest rates
Higher likelihood of loan approval
Higher borrowing limits
Improved car insurance rates
Systemic financial benefits due to being financially responsible
The number one benefit of having excellent credit is more competitive interest rates. Depending on the interest rate of the loan you qualify for, it could mean the difference between hundreds and even thousands of dollars in savings.
A high credit score is preferred because it allows you access to more competitive rates on future loans and increases the likelihood that your loan application will be approved.
Increasing Your Credit Score
Increasing your credit score is the result of good financial practices over time. By simply opening a credit card, using it, and paying it off regularly, you will begin to build your credit.
Credit scores are affected by three primary factors:
How much credit you have available to use
How much of that credit you’re actively using
Length of credit history & age of credit accounts
Credit is Easy to Lose but Hard to Build
Do you remember grade point averages (GPA’s?), I do! I remember earning A’s and B’s and rarely seeing my GPA improve, but get one C or D and watch my GPA tank. This is pretty much how credit scores work.
You don’t get rewarded for being responsible, in fact, it can take years of responsible financial practice to improve your credit score into the excellent range. Watch out, because making just a few financial mistakes can wipe out years of hard work.
How Marriage Affects Credit Scores
When you get married, your credit scores (or reports) won't merge with your spouse. Joint accounts you share may appear on both of your credit reports, but your credit history will remain independent.
According to Experian, “Marriage has no effect at all on your credit reports or the credit scores based upon them because the national credit bureaus (Experian, TransUnion, and Equifax) do not include marital status in their records. Your borrowing and payment history—and your spouse's—remain the same before and after your wedding day.”
Debt that is incurred prior to marriage remains the responsibility of the individual, but any debt incurred after marriage is shared between the two. You can assist your spouse in paying off their debt, but it won’t directly impact your score.
Will My Bad Credit Affect My Spouse?
Although your credit scores remain separate upon marriage, you may want to apply for loans together. If you’re applying for a home loan together, lenders will consider both spouse’s credit scores. If one of you has bad credit, it can reduce your chances of being approved for the loan or you may incur higher interest rates.
It’s for this reason that it’s important for couples to be on the same page when it comes to their finances. Opening store credit cards and forgetting about them or failing to pay them back is a quick way to negatively affect your credit score.
How to Raise a Spouses Credit Score
Make them an authorized user on your credit card. This allows them to make purchases on a credit card, but they can’t make changes to the account and isn’t responsible to make the payments.
Open a joint credit account together like a travel or cashback rewards card.
Help them apply for their own credit card and educate them on the basics of credit, charging money to the account, the dangers of carrying a balance, and ensuring you can pay the card off at any time
Will Changing My Last Name Affect my Credit Score?
Upon marriage and the legal changing of your last name, you’ll need to alert each credit card company, lender, and bank. Your new last name will appear on the credit report you use to apply for credit.
A Perfect Credit Score of 850 is Achievable
In fact, perfect credit scores of 850 make up just 1.2% of all U.S. credit scores though it may not be a practical goal to seek. Once the borrower is in the “excellent” range of 800 to 850, the benefits don’t typically change.
Additionally, credit scores are always changing, and simply checking them too often can lead to a reduced score. Having excellent credit really is the prize and seeking the perfect score of 850 is simply not important.
Why We Don’t Have a Perfect Credit Score
Our credit utilization rate is sub-optimal. Credit utilization is the amount of available credit you are using. Because we don’t keep a balance on our credit cards, we are penalized.
We don’t have a high number of aged accounts. Specifically speaking, we only have and have only ever had two cards to our name and we’re only 29 years old. We haven’t ever tried to improve our score.
If we wanted to seek a perfect credit score, then we would likely open up additional credit cards, increase our credit utilization, and be patient for it to age. This would likely get us much closer to that perfect score.
We’ve reached a point in our life that we don’t plan on buying another house for at least the next 15-years, possibly longer. We already enjoy historically low-interest rates on our cars and mortgage so refinancing is not going to be of interest to us.
We’re content without excellent credit and see no real benefit to pursue a higher credit score at this time.