Can my spouse’s bad credit hurt my credit rating?

[Virginia]

Is it true that once you marry – your spouse’s bad credit hurt your credit as well?

[Katheleen]

Absolutely not, with certain exceptions

Credit history, credit reports and credit scores are personal. Credit information (positive & negative) only surfaces on a person’s credit report when s/he is legally responsible for the debt. This means that none of your spouse’s existing information (good or bad) can surface or affect your credit rating.

However, it’s important to understand that if you are a co-applicant or co-signer on a loan with your spouse (or anyone else for that matter) and there are missed payments on the credit obligation, that information will show up on BOTH your credit reports when reported by the lender and will likely have a negative impact on your FICO Score.

Similarly, if you place your spouse an authorized user on a credit card and miss a payment, that information will surface of BOTH your credit reports and will have adverse effect on both your FICO scores.

Whenever you apply for new credit with your spouse or co-sign for her, be sure to read the fine print on the application form to understand if you are legally responsible for the loan.

Naturally, when you apply for new credit as a couple (such as a mortgage, car loan etc), the creditor checks both your credit ratings. As a result, your spouse’s bad credit can certainly influence the lenders decision, and most likely will set lesser terms for you. So your spouse’s bad credit can’t affect your credit directly, but can certainly affect you financially.

P.S. If you live in one of the community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington & Wisconsin), your spouse’s debt may appear on your credit report and affect your credit even if you’re not a co-signer or co-applicant.

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