If you’ve purchased a home together, you both do have a credit report, but each of you need more – as in a credit history of your own. It isn’t nice to think about, but if one of you were to expire, the other could still need credit!
Just being an “authorized user” on your spouse’s card will do you no good if your spouse is suddenly not there. In fact, I’ve heard horror stories about widows being told that the entire balance was due and payable when they informed a credit card issuer that their spouse had expired. Had they held the card jointly, that wouldn’t have been the case.
But… that’s not a reason to hold all cards jointly.
Each person – married or unmarried – should have his or her own credit history.
One reason is divorce – an occurrence that’s all too common. If it happens to you, you don’t need credit issues on top of all the others. Women, especially, have often been caught in the distressing situation of suddenly being “on their own” and having no credit in their own names, because they were only “authorized users” on their husband’s accounts.
But another reason to hold separate credit cards is for the financial survival of your partnership if things get tough.
Think about this… Many families have had setbacks lately and have had to access funds from their credit cards to get them through. Sometimes they’ve used cash advance checks to an extent that put them close to the limit of available credit on their cards. If those cards are held jointly, both partner’s credit scores have been impacted.
However, if the high “debt to available credit” accounts all belong to one spouse, the other can maintain their high FICO scores, and that could be important.
If you need to move to a new apartment, change satellite TV providers, or purchase cell phone service, you can use the “good credit” spouse’s name. If income is sufficient to meet other lending criteria, you can even use the “good credit spouse’s” FICO scores to enable you to purchase a home.
If you can do it, keep all negative information in the name of one spouse or the other, and work to keep it from affecting your joint accounts.
Keep in mind that employers also look at credit scores, so if one of you is job hunting, keep that spouse’s credit scores as high as possible.
Get both your free credit reports with scores today, then do your future planning. Do all you can to raise your credit scores now, but if you need to take steps that will lower your credit, plan ahead so that one of you keeps a high score.