When they made the movie “Shaadi ke Side Effects” or Side Effects of Marriage as translated in English they forgot to talk about effect of matrimony on Credit Score!! No worries we will remedy that. First questions first “does marriage have any effects on your credit score at all”.
Does Marriage Affect the Credit Scores of Both Partners?
The short answer is “no” at least directly. When two people tie the knot their credit scores do not merge. The credit scores are for individuals and reflect the individual credit history and continue to so even after two people officially decide to live together. While after marriage you may choose to have a joint bank account there is no joint credit score.
So even after you get married the debt and credit cards in your name get treated just the way they were before you get married. So if you default on your payments only your credit score is adversely affected and the converse is also true.
Similarly if you apply for a loan in your name only your credit history will be evaluated and not that of your spouse. Any digression only in your credit history will be considered and not his/hers. A good credit score for your spouse cannot get you any brownie points. However if you apply for a joint loan then both your credit histories will be considered individually and the decision will be made accordingly.
Some Special Tips for Women:
Women need to take care of some aspects especially when they get married. Even if you take your husband’s surname post marriage it will have no bearing whatsoever on your credit score; the credit history in your maiden name does not get erased. So you can continue with your credit trail whether god or bad.
You need to inform the concerned parties including banks and creditors about the name change so that changes can be made at appropriated places. The history gets carried forward with the new or the changed name/surname. There are others aspects like the date of birth etc that establish the identity of the person so there is no need to worry on this aspect i.e name/surname change post marriage.
Now the next aspect I want to touch upon is that women should maintain their individual credit cards and bank accounts and continue to maintain them irrespective of the fact whether you are working or not. Even if you start a joint account or take an add-on credit card do continue with at least one card and one account in your individual name whether maiden or otherwise. An old account is much more helpful when it comes to establishing the credit habits of an individual.
Your credit history could come in handy in case due to some exigency like financial hardship, death of spouse or bad credit score of spouse you need to use your credit score for applying for a loan. In case years down the line you want to start afresh and have a credit history it might become difficult and cumbersome for you to get a credit rating. Also at least a six month trail is required for a credit rating.
In case of a loan taken in joint name shall impact the score similar to a loan taken in individual name, irrespective of the fact that the person may be second or third joint applicant and repayments are being done from the primary applicant’s account.
Marriage does have some indirect impacts on your credit score. In case either of the partner is not financially disciplined it can affect the family finances and can cause you do default on payments thereby impacting the credit score negatively.
Marriage involves a lot of expenditure (at least in India) whether its pre-marriage preparations or post-marriage shopping and setting up a new house. So it’s important that you plan carefully and don’t overspend or max your credit cards. It’s not a good idea to begin a new life in debt.
A positive outcome of a marriage is two credit scores. So in case one partner has a lower credit score than you always have a choice of using the credit score of the other partner when applying for a loan.
Though marriage does not affect the credit score directly, it does impact your life and lifestyle. With careful planning, you can avoid any pitfalls and make the best of it; financial or otherwise.