I said “I do”, but does that mean my credit did too?

Disclaimer: I live in the state of Michigan, a state that is not a community property state.  The questions and answers in this blog reflect information applicable to a non-community property state.

                 August 9, 2009 I made the best decision of my life; I married my best friend.  For richer or poorer, in sickness and in health, until death do us part.  About 6 months into our harmonious marriage, we decided to make a large purchase, and assumed financing would be the best option for us.  As we began to discuss our funding options, I started thinking: how will this joint purchase affect my personal credit? I had no intentions on leaving my spouse, but I was new to understanding my personal credit, and the potential effects were important to me. We talked about credit, but not nearly as much as we should have – to be completely honest, our conversations were somewhat superficial.  After some consideration, we decide to go for it.  Excited yet confused, I decided to do some research and ask a few questions.  Here is what I asked, and the answers that accompanied them.

Will his credit report merge with my report?

• Any accounts I had prior to our union will remain on my report only, and the same will be with him.  The only accounts that will appear on both of our reports are joint accounts or anything he cosigns for me, and vice versa. If it was there prior to me saying “I do” and I didn’t sign for it, it will not appear on my report.

If I don’t want to say “I do” to a joint account, do I have to?

• Although we committed our lives to each other, we still have the option to apply for credit separately.

What happens if we fail to make a payment on our joint account? Will both of our reports be affected?

• Unfortunately, yes. Payments over 30 days late will affect both of our reports, if we opt for a joint account. While this may seem like a bad thing, if we do the opposite it could work in our favor. Establishing an on-time payment history will have a positive affect us both.  Considering we are both building credit, on time payments was an absolute given. Positive reporting wins!

After careful consideration, we made a joint purchase via financing.  Prior to signing the dotted line, we discussed how we would make the payments, the maximum monthly payment we were wiling to pay, and committed to following through; no defaults.  We made it out alive with no scratches, and no late payments reported.  We said I do, and our credit did too!