How Bad Credit Scores Affect Your Spouse

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Just got married and worried about the impact of your spouse’s bad credit rating on your good credit?

The good news is that it won’t directly affect your FICO scores. Why? Because each credit report is tied to a single social security number, which means you and your spouse have individual reports, just like you did before your marriage.

However, this does not mean that you will escape your spouse’s bad credit rating. In fact, if you’re thinking of buying a house, a car, or a credit card together, you might have the surprise of a lifetime when you see the interest rate the lending company is willing to offer you.

Bad credit joint financing after marriage

Let’s say you and your newlywed decide to convert your sports car into something more family friendly. When you do this, you are filing jointly, which means both husband and wife’s names are on the application. When auto finance companies see this, they’ll look at your two credit reports to see where you stand:

  • Excellent credit: 720 and more
  • Fair credit: 620 – 720
  • Bad credit: 550 – 620
  • Terrible credit: 550 and under

If any of you fall into the “bad credit” category, that will be their primary focus. Typically, the spouse with better credit will be considered the co-signer, while the poor credit holder will be the primary borrower. This allows them to offer you car loan for bad credit with high interest rate, short term loan and down payment requirement.

Applying for a car loan individually as a married person

Once you have reached the honeymoon stage, it is normal to want to do everything with your spouse, however, if your spouse has black marks on the credit report, it may be best to do it yourself. same. Applying for a car loan individually is an alternative to getting more favorite car financing termsand avoid being hit with high interest rates due to your spouse’s damaged credit.

Under the Equal Credit Opportunity Act (ECOA), lenders cannot ask you if you are married or base your approval on race, color, religion, national origin, sex, marital status or age. The only factor determining whether or not they approve of you is your ability to repay the debt. If you don’t have the income to repay the debt on your own; you will be refused.

Add your spouse as a joint account holder or authorized user

If you’ve decided to continue applying for a car loan independently, but still want to help your spouse repair their credit ratings save, you can do so by adding them to your credit card accounts as a joint account holder or as an authorized user. A joint account holder allows your spouse to use the credit, but they also become legally responsible for paying off the debt, just like you. An authorized user, however, can use the credit, but is not legally responsible for repaying the debt. Before making a decision on which option you want to pursue, keep this in mind:

  • If you want to remove your spouse from the account after a certain period of time, it is more difficult to do so with a joint account holder than with an authorized user.
  • If your spouse is an authorized user, they can withdraw and max out the cards, leaving you behind to foot the bill.
  • When you add your spouse to your credit account, the positive payment history will be added to their credit report, which in turn will help their credit.
  • Your credit ratings will not be negatively affected unless you stop making payments on time.

Be sure to weigh the pros and cons of these options before making a decision. If you wish to proceed in either of these situations, you must contact the credit card company to issue a card to your spouse.

As we see

When you took your vows on your wedding day, you promised to love, cherish, and accept your spouse until death do you part, but that doesn’t mean you have to come to terms with their past financial troubles. . Their credit history has no effect on yours, and you won’t see your credit scores drop because theirs are low. The only way to lower your credit score is to take on debt and not pay it off.

On the other hand, you can help your husband or wife learn from past financial mistakes and get back on track with a joint auto loan from Auto Credit Express. We help couples obtain reasonable car financing from car dealers with bad credit For more than 20 years. We have a network of subprime loan dealers who are ready to work with all credit situations, including bankruptcy and repossession.

Teach your spouse to be financially responsible by making timely monthly payments with a new car. Everyone is more willing to learn when they have a brilliant set of wheels! To get started, complete our free, fast and secure form online car loan application and you could be driving home in a new car tomorrow!

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