Can Your Spouse Hurt Your Credit Score? The Good, The Bad, And The Ugly
There are different ways that getting married, or divorced, can impact your credit score. Let’s take a quick look at some of the more common ways that your spouse can affect your credit:
The Good:
If you and your spouse go in together to get a home, car, or personal loan, then both of your credit scores will factor into the bank’s decision. In this case, your spouse’s score does affect the bank’s decision, but it does not actually affect your own score.
The best advice in this scenario is to have the person with the lower credit score take the time to raise their score before applying. If this is not possible then consider just having the person with the higher credit rating apply for the loan on their own.
You can also list each other as Authorized Users on your credit accounts. If you keep low balances, and make timely payments, then both of you get to have the advantage of boosting your credit through sharing your accounts.
The Bad:
Combining your credit accounts with your spouse does open you up to some risk if things in your marriage start to go sour.
Authorized user accounts are one example of a situation where your spouse can damage your credit score, and you can damage theirs.
When you list your spouse as an “Authorized User” you are assuming the responsibility for any charges they make on your credit card. If your spouse is angry with you, or you are going through a divorce, then the best thing to do is remove your spouse’s name from your credit accounts immediately. Otherwise you will have a legal obligation to repay whatever they charge. If they charge more than you can pay, or go over the limit, you are the one liable for the payments, not them.
The Ugly:
When Your Spouse Takes Off With Your Credit Cards:
If you are going through a messy divorce, or a heated argument, and your spouse has taken off with your credit cards, then you need to treat this as identity theft. If you do not, then you are liable for any charges that they make, and you do have to pay it back.
An un-authorized credit-happy spouse can not only cost you thousands of dollars, but they will cost you your good credit rating as well! If your cards are ever charged above 30% of their total limits you can expect your credit score to drop.
When Your Spouse Takes Off With Your Social Security Number:
It’s sad to say, but there are a whole lot of people out there who have had this happen. They get a divorce, and the next thing they know, they are being turned down for credit. What they did not realize is that their ex spouse used their personal information to open up credit accounts and get loans.
Again, this is identity theft. No matter how much you might want to care for, or protect the person, this is identity theft. You can either accept what they have done, and foot the bill, or you can report it as identity theft and press charges if you need to. There really are no other options.
Also, if you accept the theft of your information, and continue paying the bills for your spouse, your credit rating will suffer. This will not only cost you whatever amount of money they borrowed in your name, it will cost you thousands of dollars in additional interest on your future loans or mortgages because of your damaged credit rating.
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