Tips for managing joint finances when one partner has bad credit

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While it’s always important to discuss finances early, many individuals enter committed relationships without knowing the full scope of their significant other’s finances. If your partner has less than stellar credit, there are actionable steps you can take as a couple to find financial harmony.  Here’s our best tips for what to do when your partner has bad credit.

Can my partner’s bad credit impact my credit score?

The short answer is no. The full explanation, however, is a little more complex.

While your spouse or partner’s credit score can’t directly impact yours, it can hurt your future together. If you plan on making large purchases together, your partner’s low credit score could hurt your chances of getting a loan. This is because lenders don’t just take the average of you and your partner’s credit score, they actually focus on the lowest credit score of the pair when evaluating creditworthiness.

You may be wondering if a solution to this problem would be to just apply for the loan under your name (due to your higher credit score). But this in itself is a risk. While we all hope that love will last forever, if you did get divorced, you would be financially liable for the loan in its entirety. Here are a few tips for how you can navigate joint finances when your partner’s credit isn’t great.

Identify the reasons for the bad credit score

This may seem obvious, but the first step to improving poor credit is realizing why it’s low in the first place. Many Americans don’t monitor or even know their credit score. One survey found that 54 percent of Americans admit to “never” checking their credit score. This lack of knowledge makes it easy to see how some people could have a low credit score without being aware.

Many actions can hurt your credit score including (but not limited to), outstanding debts, credit utilization ratio, and a history of late payments, or having little to no credit history at all. Finding out why you have a low credit score is the first step to improving your personal finances.

Add your spouse as an authorized user on your oldest credit card

If you trust your spouse to responsibly use your credit card, then adding them as an authorized user to your longest-standing account could help them build a stronger credit history.

Authorized users get the same benefits from on-time payments that primary card owners do. As long as you are paying your balance in full and on time — and the issuer in question reports authorized users to credit bureaus — you should see improvement in your partner’s score over time.

Have your spouse get a secured credit card

If you’re not comfortable adding your partner to your credit card as an authorized user, then consider encouraging them to get a secured credit card. A secured credit card is one that you must pay a deposit upfront for the line of credit you will receive.

Secured credit cards may not have the extra benefits and rewards that come with a traditional credit card, but they help build credit for individuals who would usually not qualify for a credit card.

We have a full list of secured credit cards that you may want to consider.

Watch your spouse’s credit utilization ratio

Your credit utilization ratio makes up roughly 30 percent of your FICO score. This metric looks at how much of your available credit you are actually using.

In the eyes of credit card issuers, the less of your total line of credit t you are using, the more financially healthy you are. A good rule of thumb when it comes to your credit utilization ratio is to keep your spending at 30 percent of your total limit — or even lower if possible!

Final take

When it comes to building (or rebuilding) credit, there is no simple tip or trick that will get you a better score instantly. Like many things in life, building credit from the ground up takes time and effort on the part of the card owner. By following some of the tips above, however, you and your partner can be confident that you are on your way to a future of good credit.


Written by
Meredith Hoffman
Credit Cards Reporter
Meredith Hoffman is a personal finance writer covering credit card news and advice at Bankrate. She is originally from Columbia, S.C., and received her bachelor's degree from the Univ. of North Carolina at Wilmington. Before joining Bankrate in October 2019, Meredith worked as the news editor of Wilmington’s local newspaper, The Seahawk.