Getting married doesn’t mean that you and your spouse will share a single credit report. You will both still have separate credit reports -- and any accounts you open jointly will appear on both your reports. The bummer is, if one of you has good credit and the other doesn’t, you could find yourself in trouble when applying for credit cards, loans, insurance, or even renting an apartment.
Joint Account Holders
Sharing a joint credit account makes both of you legally responsible for repaying the debt to the credit card company. If you eventually split up and your spouse refuses to pay, it's not going to look good on either of your credit reports. Even if your divorce agreement names your spouse responsible for paying off the debt, the entry will show on your credit report as well. It doesn't matter who's at fault, late or missed payments have a negative impact on each spouse's credit standing. The way the creditor sees it is that both parties are responsible for the debt until the account is paid in full. The same is true even if you and your partner live a life of marital bliss. If you make late payments on a joint credit card account, each of your separate credit reports is going to suffer.
Individual Credit Accounts
Married or split, you and your spouse may decide that you want individual accounts. In most cases, before you can put a joint account in just one of your names, both of you must agree to the change. If the account still has a balance, the creditor might not be willing to take the other spouse’s name off the account unless that spouse who is going to maintain the account qualifies for credit individually. Usually, that means the creditor will put you through another credit check. While applying for individual credit accounts may seem like a good way to avoid trouble later on in life if things don’t work out, it can be difficult to qualify for credit on one income, especially if you don't earn a high income.
If instead of opening a joint account, one spouse makes the other an authorized user of the account, only the account owner is responsible for paying the debt. However, even though the creditor considered only one spouse's financial information for approving the credit, the account will also appear on the credit report of the authorized user. The credit report will indicate whether the user is a primary account owner or an authorized user. Whether listing the account will affect the authorized user's credit score depends on what scoring model the creditor uses. In some cases, being an authorized user can help those who are otherwise unable to get their own credit, develop a credit history. However, if as an authorized user, you or your spouse uses more than half the available credit on the account, the account owner's credit score is going to take a hit.
If you've opted to establish most of you accounts jointly and the marriage doesn’t work out, reestablishing individual credit following separation or divorce isn’t always easy. To make matters worse, if the breakup isn’t a friendly one, if you have joint accounts, one spouse can do a lot of damage to the other spouse’s credit standing, making for even tougher finances.
Amber Keefer has more than 25 years of experience working in the fields of human services and health care administration. Writing professionally since 1997, she has written articles covering business and finance, health, fitness, parenting and senior living issues for both print and online publications. Keefer holds a B.A. from Bloomsburg University of Pennsylvania and an M.B.A. in health care management from Baker College.