List the reasons you love your significant other, and we'd be willing to bet his or her credit score isn't one of them. But even if that three-digit number doesn't factor into the romantic side of your relationship, it can have consequences on its practical side.
But first, let's establish what a credit score even is. "Just like you'd check Yelp before visiting a new restaurant, lenders want to get a sense of you before advancing large amounts of money," says Elle Kaplan, finance expert and founder of LexION Capital. Your credit score is essentially your review. "It indicates how likely you are to pay a loan back on time," says Kaplan, "and it's derived from the information on your credit reports." It's a three-digit number that can range from 300 to 850.
Everything from snagging an auto loan to a home mortgage weighs heavily on your credit score, Kaplan says. "If you have a poor score, you'll end up paying higher interest rates — and possibly hundreds of thousands of extra dollars — on big-ticket items like a home," she explains. "Sometimes, you can even get outright denied for important financing if lenders see a poor score."
What's more, a low score can negatively impact your career. More and more often, employers are pulling candidates' credit reports as part of the application process, Kaplan says. And while they can't see your score, they can see the financial history that lead to a low number, and they may choose to not hire you.
That brings us back to how your spouse's credit score can impact your marriage. It's important to know that even though marriage is a union, "you'll still both have your own scores after saying I do," Kaplan says. "Your credit report and score remains completely unchanged." But that doesn't mean your finances and future won't be affected by one another's number.
"For any joint accounts you combine after marriage, they affect both your credit scores going forward," Kaplan explains. "So if one partner misses a payment, you'll both be affected. That's why it's important to make sure any behavior that caused poor credit in the first place is nipped in the bud before combining accounts."
When you apply for your first mortgage together, both your scores will count, too.
"Unfortunately, your scores don't average out for this," says Kaplan. "Mortgage loans have hurdles that both credit scores need to pass in order to get approval." If both your scores can't jump over those hurdles, you won't be able to get a mortgage.
And, "even if you both meet the hurdle to get approved for a mortgage, the lowest score can have an impact on the interest rate you're offered," Kaplan says. "Even a hundred-point difference can impact your mortgage rate. While a percentage point might not seem like much, it can mean hundreds of thousands of dollars in extra payments over the life a mortgage." Ouch.
Of course, you aren't required to co-sign for financing with your spouse. "But this can be limiting because it only takes into account your income," Kaplan says, "and it can affect the size of the loan you qualify for and your rates." The same principals apply whether you're applying for a home mortgage, a car loan, or any other financial aid.
Lastly, just remember this: "Financial issues are cited as the No. 1 cause of marital problems, and plenty of relationship milestones, like buying a home together, can be tied to credit scores," Kaplan says. "If one partner has a poor score, it can cause more than financial damage. That's why couples need to be open and honest about finances from day one of a relationship. Although you shouldn't date based on credit scores, you do need to make sure you partner is on the same page as you financially, even if it means repairing credit."