Her credit score is 700s, his is in 500s
My friend just shared a concern of his. The 24-year old daughter is dating some 30-year old guy. They have been going out for nine months and lived together close to four. They are talking about buying a house together since the buyer market is good, getting engaged, married ... the works. The concern is about credit scores. The girl score is around 780 whereas the guy score is in the very low 500 range. Her parents are naturally worried. They have several questions,
- will the credit score merge if these two get married
- will they be able to get a mortgage, a car loan
- what will happen with his student loans, some are delinquent
- what can she do to help him improve his credit score
Generally, when two people handle money quite differently, basically the other can't handle it, things don't look good marriage wise. I am not a counselor, but most marital problems steam from the lack of money. If one spouse mishandles family finance, marriage is often over. The difference between her and his credit score is quite startling. But she is in love. Whatever, I put my two cents worth, just for the record.
No, the credit scores do not merge after the marriage. Each spouse still has his and her individual credit scores. Perspective lenders can run a joint credit report for a couple, or separate one for him and her. In this case, his very bad credit score makes purchasing a property very problematic. I told my friend that if his daughter can qualify income-wise to buy a house on her own, she should not put the boyfriend on the home title. Until he proves he is credit worthy.
Same goes about car loans and credit cards. His delinquent student loans will stay with him, especially if they were acquired before they get married. The problem they may likely face as a couple is with health insurance. Life, health, auto and home insurance companies will run credit reports to determine certain risk factors that influence the rate consumers pay. Health insurance in particular, as they likely to buy it as husband and wife. Even if he buys his own policies, it will cost him more and ultimately affect them both.
His job search may get more difficult because more and more employers now check credit reports of job seekers. In current job market conditions, bad credit score adds another potential road block. I mean, if you have two equally qualified candidates, wouldn't you take the one with higher credit score. The higher credit score demonstrate maturity and responsibility.
As far as helping him to get back on credit track, adding him as an authorized user to her account or two, would help to raise credit score as over time, he would benefit from the timely payments that show up on his report as the daughter continues to make them. The problem and quite dangerous one is that by adding him to her account, she would give him permission to request a another card or use the card without any authorization. Which leads us to Community Property state. Which is what Wisconsin is.
In community property state, any debt that he accumulates after marriage becomes equally her responsibility. So much for her credit score, his credit score. If he has credit cards on his name only, it does not matter. Not knowing the fact that the spouse gets into a debt after the marriage is not an excuse. There are many cases when even after divorce, creditors come after an innocent ex. Even if according to divorce, the other party is responsible.
Thu Feb 10, 2011 10:02PM | Copyright: www.bad-credit-advisor.com | More in Credit Score Help | Comments (0)
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