Does your partner’s credit score affect yours?

It might be a little too forward to ask a potential love interest what their credit score is on the first date, but if you’re starting to get serious, it could be time for a serious conversation.

Making plans to get a joint bank account or merge your finances entirely can be an exciting step in a relationship. However, it’s imperative that you have a good understanding of your partner’s money habits first, in order to protect your own financial wellbeing.

After all, if you and your partner aren’t on the same page when it comes to spending and saving priorities, you could risk hurting your own personal finances and creating conflict in your relationship.

Openly communicating with your partner about your finances can allow you to help each other achieve financial goals both as individuals and as a couple.

One thing you might be wondering is whether your partner’s credit score could affect yours.

Merging your finances, moving in with your partner or even getting married won’t directly impact your credit score.

So, if you’ve worked hard at building an excellent credit score and your partner’s is average at best, there’s no need to worry about it affecting yours.

However, having an understanding of your partner’s credit score sooner rather than later can be beneficial because it can give you the opportunity to work together to improve it, if need be. In doing so, you can give yourselves a better chance of achieving your joint financial goals, such as home ownership.

When might your partner’s credit score affect you?

Although your partner’s credit score won’t affect your own, there are other ways in which it might affect your options, such as:

Joint applications for finance

If you do have plans to apply for finance, such as a home loan, together in the future then it is worth thinking about how your partner’s credit score could affect the outcome of the application.

When you submit a joint application for finance, the lender will assess both applicants’ creditworthiness before making a decision and determining an interest rate. If you have an excellent credit score, but your partner’s falls into a lower band, or vice versa, then it’s unlikely the lender will offer you their most competitive interest rate.

Similarly, if you or your partner have a bad credit score, the lender could potentially reject your joint application altogether, regardless of the other applicant’s score.

This is because both applicants are equally liable for the debt, so the lender is responsible for assessing the overall level of risk.

Joint finance defaults

If you take out a joint credit card with a partner and one of you overspends to an extent that makes the repayments unaffordable, this could lead to a default. The issue with a default on a joint credit card (or any other form of joint finance) is that it will be recorded on both of your credit histories, as you are equally liable.

The other side of the coin is that if someone with a low credit score opens a joint credit card with a partner who has a good credit score, and the card balance is paid on time and in full each month, it could positively affect both of their credit scores. Consistent, positive credit behaviours can improve the credit scores of both account holders of a joint credit card.

This is why it’s important to not only know your partner’s credit score, but also have an understanding of their current money habits and financial wellbeing.

How can I help my partner improve their credit score?

It’s important to remember that a person’s credit score doesn’t define them. Just because someone might not have an excellent credit score doesn’t mean they are inherently bad with money. Sometimes things can happen that may be out of a person’s control, such as losing a job, unexpected medical bills or other issues that may lead to a lack of income.

If you trust your partner and they have demonstrated responsible financial habits, there are ways you could consider working with them to help them improve their score.

You might like to start by discussing and setting financial goals together, and then consider your options:

• You could list your partner as an authorised user on your credit card – If you have an existing credit card in your name with a competitive interest rate, you could consider listing your partner as an authorised user. If used responsibly, this may help your partner’s credit score over time and is particularly helpful for those with a thin credit file and a lack of credit history.
• Apply for a joint credit card with a small credit limit – If you are confident that you and your partner are on the same page when it comes to spending, you could consider applying for a joint credit card. Even a card with a small limit could help improve a credit score if it is used consistently, sensibly, and regularly paid off in full. Just keep in mind that you likely won’t be eligible for the most competitive interest rate on the market to begin with.
• Keep track of progress made – Ensure that both you and your partner are regularly checking your credit files to monitor changes in your credit scores. If your credit scores have improved, you may be in a position to negotiate better interest rates with your credit providers. It’s also a good idea to regularly check your file for discrepancies and dispute any that you may find.