In the case in which you and your spouse have joint financial accounts, you might anticipate that your credit scores are the same. Still, this isn’t the case. In most situations, your spouse’s credit score will be distinct from yours. And this isn’t an error of any kind; that’s how it’s supposed to be.
Although you and your spouse are tied in holy matrimony, your credit files remain separate. Your credit history is connected to your personal information. Now, let’s have a look at some aspects regarding this topic.
Payment History Is a Significant Consideration
Payment history is a quintessential element that affects the credit score. For example, if you have a history of paying late, whereas your spouse always paid on time, he/she will have a better rating than you. Loan default, foreclosure, bankruptcy or repossession could also reduce one spouse’s credit.
Moving on, the amount of debt you have is just as important. If you have big balances on your credit cards, and your spouse pays their credit card in full, you’ll notice a distinction in your credit score. As for high loan balances, these could negatively influence your credit rating.
Your Spouse’s Credit History Is Longer Than Yours
If your spouse is older than you or he/she started using credit before you did, you could take advantage of that. Simply put, the longer the credit history is, the better you will rank. This applies, in particular, if you have a positive credit history.
So, what your spouse could do is make you an authorised user on an old account, so that your credit age would look better.
You Have Recently Applied for a Loan
As you already know, applying for new accounts could temporarily decrease your credit score. First of all, whenever you make a new application, an inquiry is recorded on your credit history. That usually costs a few credit score points. As for opening a new account, this might further decrease your credit age.
What If You Apply for Credit Together?
If you are looking to apply for credit together, lenders can choose either the higher credit score or the lower one. Or, sometimes, they might balance the two and use the average of the two credit scores. In order to benefit from the best deal, you should discuss this matter with your lender directly. This way, you’ll know how to make your application so that you maximise your chances of getting a convenient interest rate.
Take into account that the only scenario in which you could use both spouses’ income is if you apply together. That’s why your credit score should be in the best shape possible.
The spouse that has a lower credit score could raise their score by paying off overdue bills, balances or disputing possible errors. So, before working on a joint application for a loan, we advise you to start working on your credit. That way, you increase your credit rating so that you qualify for better terms.
If you’re having trouble getting a loan due to imbalance in credit scores, contact Bad Credit Loans for your ideal financial solution.