Does my credit score merge with my spouse when I get married ?
No Merger but Entanglements Abound
Do Credit Scores Merge with Marriage? No. There is no merger as such, but realistically there are always a number of financial entanglements that go along with marriage. First and foremost, of course is the question of whether or not you hold real estate together as joint tenants or tenants by the entirety. Tenants by the Entirety is a special form of Joint Ownership that protects married couples against a forced sale in the event the marital domicile is attached by a creditor.
Legal Doctrine of Necessaries
There is a doctrine in law that goes back more than 300 years holding a husband responsible for “necessaries“. on his credit if he refused to provide them. Necessaries means just what it sounds like. They include food, clothing, shelter, medical care and education for minors. This doctrine has been expanded to apply to both spouses in most states. Obligations of this nature rarely find their way into credit reports.
Putting aside real estate issues for the moment, financial issues from divorce often involve joint accounts. The divorce decree may specify who is responsible for these joint accounts, but it does not break the contract with the lender. Late payments will appear on both credit records. regardless of what the divorce court’s judgment says. The corridors of divorce courts everywhere are filled with venomous people angry at that person they once loved who is not keeping up with their end of the bargain. Credit Reporting Agencies are not really about fairness and don’t care which party may be in contempt of court.
Community Property States
If you live in one of the 9 community property states, I’m sure you know it. I’ll list them anyway for the sake of those who are contemplating moving:
- New Mexico
Keep Accounts Segregated
Becoming joint users on each others credit cards can have a profound effect for the worse on the spouse with the better credit score. Becoming an authorized user to the spouse with the better credit card account is another matter. Simply by adding a spouse to the best credit card in terms of age, payment history and debt to available credit ratio can give an immediate boost to the other credit score. The bad credit doesn’t flow back to hurt the good credit. This beneficial effect remains even if the authorized user is subsequently removed from the card. Keep the finances separate if there is a significant disparity. If one spouse has judgments a joint tax rebate could be seized!
Don’t become an enabler by bailing out the spendthrift spouse! This is not a long range solution. Those excessive credit card balances must be paid down the hard way. Discretionary spending must be cut. Sacrifices must be made.
Do Credit Scores Merge with Marriage? No. The goal is for the lower score to even up with the higher score over time. In the meantime keep your accounts segregated to prevent creditors from coming after joint assets.
In Case of Divorce
Romantic as I may be, it is a cold fact that half of all marriages end in divorce. With that unpleasant reality in mind there are several things to keep in mind if divorce comes:
- The court decree does not change the original contract on joint credit accounts.
- Cut off future charges immediately
- Settle up as soon as possible by shutting down joint accounts and getting your own cards.
- Transfer balances to the primary account holder
- When necessary as a back up have the debt labelled as a support obligation in the decree so the debt cannot be discharged in bankruptcy
- Consider taking responsibility for joint debt if you can offset it with another concession of equal value.