My fiancé is divorced and lost his house to foreclosure. He has a bad credit history including bankruptcy. When we marry, what are the pros and cons of my taking his name? My credit is pretty good—good enough to buy a home two years ago. I've heard that marrying and taking their name is a huge mistake if there are credit problems. Can you advise, please?
- PFI
Dear PFI,
Getting married and taking your new husband's name will not cause your credit histories to be merged. It isn't your name itself that impacts your credit history; it is the activity that is associated with your name.
Married Couples Don't Have Joint Reports
Everyone has their own credit report, even after marriage. Each individual's credit history contains only the information that is reported in their name.
When you notify your creditors of the name change, they will update their records and report your accounts in your new name. Experian will match these accounts to your existing credit history and continue to update your accounts and include them in your report along with your new name. Accounts that belong to your fiancé and to which you have not been added will not be added to your report.
So, your fiancé's accounts and credit history—including bankruptcy—prior to the marriage will not be added to your credit report after you are married, unless your name is added to his accounts as a joint account holder or authorized user. Your account history will not be added to his report, either—unless you add him as a joint owner or authorized user on your accounts.
Your fiancé might benefit from becoming an authorized user or joint account holder on your accounts because the positive payment history would be added to his credit report, which could help him begin rebuilding his credit history. This can be important because, while your credit reports will not be merged, both will likely be included in the decision when you apply for joint accounts in the future.
When you apply for joint accounts, the lender will require both of your incomes and credit history to qualify, especially for large expenses such as a vehicle loan or a mortgage. When you apply jointly, his past credit difficulties could hinder you from qualifying for the credit you want with favorable rates and terms, even if your credit history is good.
Another important consideration is that state community property or joint property laws may mandate that any accounts opened during the marriage be joint or in both names. By improving his credit history, your fiancé can help ensure you'll be able to get the new credit you need.
Authorized User vs. Joint Account Holder
If you do decide to add your new spouse to one of your existing accounts in order to help him rebuild his credit after bankruptcy, there are a couple of options to consider:
- Joint account holder: As with cosigning for a loan, being a joint account holder on a credit card account means you are equally responsible for the account and any debt incurred, even if you're not the one who made the charges. The account history, including any missed payments or high balances, will appear on both your credit history and the joint holder's.
- Authorized user: An authorized user has permission to use the credit card, but is not responsible for making payments on the account. Because of this, not all credit card companies choose to report their accounts to the authorized user's credit history. Being an authorized user on an account in good standing can help a person start building their credit history, but only if the credit card company reports the authorized-user account to the national credit reporting companies (Experian, TransUnion and Equifax), so you'll want to check with your lender first.
Rebuilding Credit After Bankruptcy
Aside from being added to one of your accounts, your soon-to-be husband can also begin rebuilding his credit by:
- Applying for a secured credit card. Having a bankruptcy on his report may make it difficult to qualify for a traditional credit card account in his name right away. Secured cards are easier to qualify for because you give the lender a deposit in exchange for a card with a small limit. The lender uses the deposit as collateral in the event you don't pay your bills, so there is less risk to them. Ask the lender whether they report their secured cards to the credit reporting companies before applying. If he uses his card responsibly and makes all his payments on time, the lender may eventually agree to convert the account to a traditional credit card.
- Signing up for Experian Boost®ø. If he has a cellphone, utility or other streaming service payment in his name, he can get credit for his on-time payments by signing up to have them added to his Experian credit report with Experian Boost. Enrolling in this feature is free and easy, and Experian will provide a free credit score both before and after payments are added to his report so that he can see how much his credit score has changed.
Marriage is a partnership, and you can work together to restore his imperfect credit history, but that doesn't mean you have to damage your credit history while doing so.
Thanks for asking.
Jennifer White, Consumer Education Specialist