Getting Married...how will that impact credit?

Hello specialsaucess,

I dont think you need to worry so much about this marriage here. Pretty simple stuff, if you keep your financial activities separate it will not affect your credit rating in any way.

Now you have asked what in case you want to buy a house. I would suggest two ways.

1) Buy a house in your name so that you get a good bargain with the interest rates. Now who pays the mortgage every month does not matter because it will be reported only to your credit file and hence will keep your score going. Your spouse' score will not affect yours because he/she is not directly involved in the financial transactions here.

2) Now if you both want to purchase the house together, the joint venture will affect both your credits. However your decisions will be mutual so which way you choose will depend on you. Try improving the bad credit. You can co-sign a lower limit credit card for your spouse' use and make full payments for it on time. In another year when the score improves let your spouse take a card on his/her own. This help build the credit and eventually you both can purchase a home together.

These are just suggestions. Everything surely depends on your personal outlook and how you want to deal with your crisis. All I can say is that you are not in a grave situation. Given that you have good credit there are ways that you both can have a financially sound life. Good luck.

You actually don't even need to worry about your spouse's bad credit when buying a house. I work for a bank and know of many other banks that will give you an interest rate based on the better of the two scores when a husband and wife apply for a home loan. You'll have to be very upfront about this and ask. If they won't tell you then call someone else.

As far as increasing your spouse's credit, instead of co-signing a new credit card just try to have him/her added to your current credit card accounts. It's not going to hurt your credit to have someone added but it will really help to improve your spouse's credit because most credit reports won't actually list the date that he/she was added so it will look like an account that has been open and in good standing for a long time. That's what I did with my wife to increase her score.

And as Anthony said, when you get married your credit reports stay entirely seperate. It only matters when your applying for a loan together so if your both comfortable with it you could always buy the home in just your name while your building your spouse's credit. You could always refi in a few years to add him/her on if you need to.

I agree with both Scott and Anthony. I would suggest to keep finance separate till the bad credit can be improved. Catching up with regular payments, disputing wrong items, can help improving the credit.

I did not know that some banks did offer loans on the basis that Scott cited. It is new to me if you could explain exactly how it works?

Certainly. When you are applying for a joint application the lender does in fact pull both of your credit reports and each of you are given a credit score for your own report. It is at this point where some lenders will take a combined average or both scores or they simply use the higher of the two to determine the interest rate they will qualify for. I do appologize for not being more clear about what kind of loans I know this works for. Being that I don't do traditional first mortgages myself but I do handle home equity loans, which can be used to buy a home, I'm not exactly sure how this would work for a traditional mortgage loan. As long as you don't need to have your escrow(taxes and insurance) included in your loan a home equity loan would work just fine for purchasing a home. They usually have much lower, if any, closing costs and the interest rates are very comparible to that of a traditional first mortgage.

I hope this is the answer you were looking for. If not feel free to ask away. And best of luck to you specialsauces in whichever path you choose!

Im really glad I got such a lucid answer from you. Thanks a lot for the information Scott. Any update specialsauces?

I also agree on keeping everything seperate for now.