By John Ulzheimer for Credit Sesame
Before you tie the knot, keep in mind these top three credit myths:
Marriage Credit Myth #1: When you get married, your credit reports and credit scores merge.
This is a common misconception about credit reporting. When you get married absolutely nothing happens to your credit reports. Credit reports are maintained at the individual consumer level, not at a joint or family level. This means you will always have your own individual credit report and your new spouse will have his or hers.
However, this doesn't mean your credit reports are full of mutually exclusive information. If you decide to apply jointly for credit accounts, then those accounts will show up on both of your credit reports. In fact, after many years of doing this, your credit reports might look almost identical.
Now, there is one scenario that might confuse you into thinking your credit reports merge when married. When you apply for a mortgage loan the lender is going to pull all three of your credit reports and all three of your co-applicant's (typically your spouse) credit reports. The credit reports are going to go through a process of merging, which gives the impression that you have joint credit reports. Rest assured, this is simply a cosmetic exercise that mortgage lenders use to simplify weeding through six individual reports.
Marriage Credit Myth #2: We have to apply jointly now that we're married.
No, no, no. When you get married there is no "rule" that you have to apply jointly for credit or that you have to add your spouse to your credit cards as a joint cardholder. In fact, you can continue to maintain your credit independence for as long as you wish.
The only real benefit for applying jointly is that the lender considers both of your incomes when deciding what to do with your credit application. For credit card accounts, it makes absolutely no sense to jointly apply. For auto loans, again, it makes no sense to jointly apply. For mortgages, it might make sense because you may need two incomes to qualify.
Keep in mind that when you jointly apply for credit, both of you are fully liable for payment. Both of you are equally at risk for any negative credit reporting or collection actions if the account goes into default. And, as previously mentioned, joint accounts will show up on both of your credit reports. Keep reading...
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