When taking out any kind of loan, be it a short term loan, payday loans, or any other form of borrowing, you may be wondering whether your partner’s credit rating may affect your personal finances. Fortunately, generally speaking, who you live with will not affect your credit score, unless you are financially linked to this individual. If there is no legally binding agreement between you are your partner, then you shouldn’t need to worry about your credit rating being affected. For help with the best loans, lenders such as LoanPig can assist with any financial issues you may be currently facing, helping you and your partner secure your joint financial situation.
Does Marriage Affect Your Credit Score?
If you are married and hold a joint account with your partner, you will find that your partner’s financial situation will be taken into consideration, even if they are not applying for a loan, or joint loan themselves, and vice versa.
If you plan on getting married, it is essential that you take certain steps to make sure that your credit rating is protected, and this will really pay off in the long term. Factors to consider include ensuring bill payments are made on time, which means that you should always carefully manage your spending prior to the application process. Managing uncertainty and building towards your long-term goals doesn’t have to be difficult once you are married. Action that can be taken to ensure long term stability include:
- Making a budget to fully understand your partners finances.
- Contacting lenders immediately if you feel you may anticipate any problems in paying a credit card or loan.
- Contacting your mobile phone, utilities, or other service provider if you think you may need to make late payments to your phone. Contacting them early will put you in a much more secure position, allowing you to make possible alternative arrangements.
Are There Any Drawbacks To A Financial Association?
There can be consequences when a relationship ends, especially if it is a binding marital one. Before you enter a financial association with a partner, always consider the potential negative financial outcomes if the relationship were to fall apart.
A joint credit agreement will always state that you are “jointly and severally liable for the debt”. What this means, is that if you split up, you will still both share equal responsibility for repaying that debt. If the other party fails to keep up their half of the repayments, it is possible that you yourself could be chased for the entire amount, which would in turn be reflected on your credit score.
Possessing a joint account means your partner, or ex-partner, will have just as much access to the funds in that account as you do yourself. This can put your finances at unnecessary risk. These issues will only arise if you are in a legally binding relationship, so you shouldn’t need to worry if you are simply cohabiting.