It may seem unromantic, but getting married is a financial commitment in addition to being an emotional one. You might wonder whether a new husband's former bankruptcy affects his new wife. The good news is the husband's bankruptcy should have no direct effect on the wife's credit score. The bad news is the husband's poor credit history may indeed have an effect on your future credit transactions as a couple.
A former bankruptcy will haunt your credit history for years to come. If the husband filed a Chapter 13 bankruptcy, in which he paid back at least some of his debt, the bankruptcy will stay on his credit report for seven years. In the case of a Chapter 7 bankruptcy, which has no such payment plan, the husband's credit report will reflect the bankruptcy for 10 years. Since there is no such thing as a joint credit report, a husband's bankruptcy and credit history will remain his own. The wife's credit report will be completely unaffected, even after marriage.
Applying for New Credit
A husband's former bankruptcy may cause problems for you as a couple, however, if you apply for new credit together. If you apply for a joint credit card or a joint home mortgage, the bank will take each of your individual credit histories into account, which may result in the denial of your loan altogether. At the very least, you can expect that the interest rate offered on your mortgage or credit card will be much higher than it would be if you applied for the loan on your own. If you do choose to apply for credit on your own, your lender will typically consider only your income. In that situation, the size of the loan for which you get approved may be much lower.
Community Property States
Even if the wife applies for credit in her name only, the husband's former bankruptcy could be a problem if you live in one of the nine community property states. Some lenders in these states consider any application for credit you make, even in your name only, to be a joint application, meaning a husband's former bankruptcy would again come into play. As of mid-2012, the nine community property states were Arizona, New Mexico, Washington, Idaho, California, Nevada, Wisconsin, Texas and Louisiana. Residents of Alaska also have the option to declare property to be community.
Authorized User Status
One way that a wife could help improve her husband's credit is to make him an authorized user of any existing credit cards. The wife's credit history for those accounts will then show on his credit report. Over time, his credit history will improve. The wife takes a risk doing this, however, because if he mishandles any of the accounts, those marks will also appear on the wife's credit report. For example, if he fails to make timely payments, the late payments will damage the wife's credit score.
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