marriageGetting married is a wonderful experience, but after the walk down the aisle, the vows and the I do’s come some really hard but important decisions, one of the most important being how you and your spouse will manage your finances. Even if you and your partner file taxes separately and manage separate bank accounts, marriage still affects your bottom line in some manner. This can become apparent when managing things like your credit. Although one partner’s credit doesn’t directly influence the other’s, being married opens up new borrowing options that make your credit susceptible to changes it previously wasn’t. While we know your love life has some impacts on your credit score, here are a few things newlyweds will want to keep in mind in regards to their credit and identity.

Threat of identity theft may increase

Major life changes like a marriage provide an opportunity for scammers to either target you or steal your identity since your information is appearing on not only on public records, but also social media and wedding websites. Because it can be hard to manage all of your information on these sources, you might want to consider investing in an identity theft protection service before or after you get married, as it’ll not only alert you when your information appears on a public record, but also warn you if your information is found on the Internet black market. Many services offer family plans that allow two adults, as well as any children in the household, to be covered under one monthly fee. The top-rated identity theft protection services even monitor the activity on your credit reports and alert you if a new account appears or changes are made. Even if you opt to not get identity theft protection, you should at least make sure to check in on your credit reports and scores on a regular basis.

Potential increase in credit report errors

Your three credit reports are reflections of only one specific individual, but because married individuals may share things like loans or family names, changes in the couple’s life could impact their individual credit reports. For example, the act of changing your name on your credit accounts might result in discrepancies in your credit history. After you legally change your name, you not only have to alert all three credit bureaus of the change, but you’ll also want to reach out to each of your creditors, including your credit card providers and loan or mortgage lenders, to get your name updated on their system. Since you’re required to reach out to so many different banks, financial institutions and agencies, the threat of potential credit report errors increases, as one minor misspelling or misplaced hyphen from one creditor or bureau can be reflected on your credit reports.

Joint loans put both of your credit scores on the line

There are certain types of debt that you and your partner might decide to take on jointly, like mortgages, personal loans and car loans. Although you may be excited about sharing your first credit account, it’s important to be aware that with joint loans, you’ll both be on the hook for the balance, regardless of who has higher credit scores. This means if you fall behind on payments, both of your credit scores will be impacted. Conversely, timely payments on a joint loan will improve both of your credit scores, which is something to look forward to. Something else to keep in mind is that to even be eligible for joint borrowing, both of your credit scores need to be checked and verified. That said, one partner with bad credit may not rain on the parade for both of you, as typically the partner with the lower credit scores simply offsets the scores of the partner with better credit, but it could impact the interest rate you pay — lower credit scores will likely increase the rate. On the other hand, if you both have excellent credit scores, you’ll likely receive a stellar interest rate. And if both applicant’s credit scores are low enough, the joint loan request will be denied.

Cosigning also impacts your credit

Consigning is the other way which your credit scores can affect one another. Unlike joint lending, cosigning doesn’t treat both borrowers as equals. The primary borrower is responsible for the loan until they default, then the cosigner becomes fully responsible for the debt. Any failure to pay off the loan could slash both individuals’ credit scores, regardless of who took out the loan in the first place, and timely payments on the loan can benefit the cosigner, but not nearly as much as it would if the loan was taken out jointly or by yourself.

While it might seem strange cosigning for a spouse, it’s not uncommon. For example, when a spouse may want to go to school (or go back to school) and doesn’t qualify for loans on their own, it makes sense for the partner with higher credit and income (assuming the student will not be able to work full time) to cosign. Keep in mind that an arrangement like this will have you on the hook for the debt forever. Divorced or not, student loan debt cannot be discharged by either the borrower or the cosigner.

Cosigning for credit cards was also a fairly common practice in the past, but nowadays, it’s very rare to cosign for cards or even partake in joint credit card borrowing, as only a handful of carriers support these types of enrollment policies.

For more information about managing your credit, check out our credit monitoring blog.