Individual FICO scores after marriage stay that way
Joint credit score misconception is something I have been finding really hard to grasp. Bunch of people I know, some considered somewhat intelligent, think quite adamantly that once married, a couple has a joint FICO score. Last Friday finally, I had enough. I was at the wedding rehearsal dinner, have you ever heard of that one by the way? - where several young kids were talking about the importance of marrying someone with good credit score, because it is going to greatly affect their future joint FICO score. One did the talking, others nodded vigorously in support. To my shear horror, one was majoring in finance with a year to go, and the other was about to take an entry level accounting position at downtown firm. I did not say anything but I am putting it here, in the clearest way.
Joint FICO score? There is no such a thing, period. If you are married, there is no way your spouse credit would affect yours. All you have are individual or personal FICO scores. One is husband's, the other is wife's. Simple right? No not really, because if either of you has bad credit score it will affect your buying power, especially if you are looking for a mortgage.
When you are apply for a mortgage, your income, liquid assets and yes FICO, are three most important qualification factors. If your wife credit so bad that she can not be on the joint mortgage application, her income as well as the recurring monthly expenses will not be counted against the would be debt to income ratio, so you can only be approved for a smaller loan. It especially hurts if your wife income is significantly larger than yours and her recurring monthly expenses are lower. So instead of getting a $400,000 loan, you are only qualified for a $180,000. If she has her own bank accounts that you thought could be used for down payment and / or assets, you will find it very hard to convince the lender to accept it. Don't feel single out ladies, same goes for husbands too.
Having one spouse with bad credit can also affect your abilities to get another auto loan if the good FICO spouse has already a few. At the very least, the interest rates won't the best. Other big ticket items like vacation homes, boats, RVs will also come at steeper cost if at all. And if you to decide to put your bad FICO half on your credit card account as joint account holder vs authorised user to help her or him build credit history fast anew, better make sure that credit card gets paid on time.
Thus here is the sound conclusion. Once married both spouses keep their individual FICO scores. While joint FICO score is a complete fiction, having a spouse with bad credit does make life a bit more difficult.
Mon Sep 6, 2010 02:09PM | Copyright: www.bad-credit-advisor.com | More in Credit Score Help | Comments (0)
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