Getting married doesn't magically create one joint credit report out of two separate ones. Your credit history is still your own, and your husband's is still his. They don't combine, unless and until you take out a joint loan together. Even then, only that account appears on both your histories.
When it comes to credit, there's your score, there's your husband's score, and there's your joint history. For example, the credit card you signed up for before you were married appears only on your own credit report. Your husband's student loan that he took during your marriage but in his sole name appears only on his. However, a car loan you take out together appears on both your credit reports. Therefore, if you're applying for a mortgage on your own, your credit score will depend on your credit card and the car loan, but the student loan won't have any effect on your approval or interest rate. Even if your husband defaulted on his student loan, it won't affect your mortgage at all.
Applying for a Joint Mortgage
Applying for a joint mortgage is an entirely different matter. There's no easy answer as to how your husband's score might affect the process because different lenders use different criteria. If your credit score is 700 and your husband's is 580, some mortgage companies will base approval for the loan and the interest rate on his 580 score – the lowest. Other lenders will use the score of the co-debtor who earns more, so if you earn $75,000 a year and your husband earns $50,000, these companies will go with your 700 score. Still others will collect each of your reports from all three major credit agencies, establish the median score of each, then use the lowest. Using your husband's 580 score can make a big difference – only about 3 percent of all mortgages are approved for borrowers in this range, while a 700 score increases your odds of approval to more than 23 percent.
There's no law that says you and your husband have to take out a mortgage together. If you have the higher credit score, you can apply for the mortgage on your own, but there are a couple of catches. You can't count your husband's income if you do this; approval rests entirely on what you earn. Your jointly held accounts will add to debts to those in your sole name when the lender determines your income-to-debt ratio. Additionally, your husband may have to legally relinquish his ownership interest in the home through an additional deed prior to lender approval.
Many of the usual rules go out the window if you live in one of the nine community property states – California, Wisconsin, Texas, Louisiana, Arizona, Idaho, Nevada, Washington and New Mexico. In these states, it doesn't matter which spouse takes out a loan during the marriage. Even if an account is in your husband's sole name, it's a joint marital debt. You're both equally responsible for it – and its payment record – could turn up on your credit report.
- Fox Business: The Truth About 7 Common Credit Report Myths
- The Mortgage House: Credit (FICO) Scores
- Kiplinger: When One Spouse's Credit Score Is Lower
- LendingTree: What Credit Score Do You Need to Get a Mortgage?
- Bedrock Divorce Advisors: Do You Live in a Community Property State or an Equitable Distribution State?
Beverly Bird has been writing professionally since 1983. She is the author of several novels including the bestselling "Comes the Rain" and "With Every Breath." Bird also has extensive experience as a paralegal, primarily in the areas of divorce and family law, bankruptcy and estate law. She covers many legal topics in her articles.