Money Mondays: What to do if your partner’s credit history affects your own

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Money Mondays is your go-to guide for all the information you need to manage your finances. For this week’s Money Can’t Buy Me Love column, we speak to a credit expert about what you can do if your credit rating has been damaged by your partner’s.

Many people don’t realise that it’s possible ‘catch’ a poor credit score from a partner. But how do you know if you’ve been affected by someone else’s chequered financial past? And what you can do to rectify it?

To help you better understand what makes your credit rating tick, we spoke to James Jones, credit expert and head of consumer affairs at Experian.

Here, he addresses all your credit questions. 

How can you tell if your partner’s credit rating will affect you?

Whenever you apply for joint credit with someone else, your two credit reports will link together. This is called a ‘financial association’. This could be, for example, a joint bank account, credit card, or mortgage.

The financial association will then appear on both your credit reports and link them together in the eyes of lenders. If you have a less-than-perfect history of repaying money you owe, this could affect both of you in the long term, so it’s important to check your credit report before applying for joint credit.

It’s important to be open about your financial situation, both past and present, before applying for joint credit. And remember, any negative information on either credit report could also mean you might not get the best deals. 

Aside from a partner, who else’s credit rating could affect us?

If you are financially linked to anyone, they may impact your chances of getting credit, particularly if they have any negative payment history. It doesn’t matter if it’s a partner, friend or family member – if you apply for joint credit together then your financial association will appear on both of your reports.

Unless you have become financially associated, you won’t be impacted by anyone else, as credit reports are based solely on the individual. It’s a common myth that previous or current occupants of your home can affect your score.

What impact does a partner’s credit rating have on our own?

If your credit report becomes linked to someone with a poor record, it can affect your chances of being accepted for credit in your own name too. According to Experian, one in six people say they have been negatively impacted by a current or ex-partner’s credit history.

Take the time together to understand if you need to improve one or both of your credit reports before applying for credit together. Make sure you do this well in advance to give yourselves the best chance of being accepted and getting the best rates.

What can you do if you and your partner are unable to get credit due to one of your ratings?

Sit down and look at your credit reports together – that way, if you have a low score, you can look at your credit history to find out why, and how to make any improvements. 

As well as paying off existing debts, it could be something as simple as ensuring you are both on the electoral roll. You can use the Experian Credit Score to help you monitor progress.

If a relationship does end, you need to make sure you are no longer financially linked to your ex. The best starting point is to make sure any joint accounts are closed. Sometimes this may take a little longer if it is a loan or a mortgage. 

Once any joint accounts are closed then you can contact all the credit reference agencies to do a financial disassociation. When the link is removed then they will no longer be able to affect any applications for credit you make in the future. At Experian, you can do this by filling in a Financial Dissociation Questionnaire.   

Illustration: Samad Jble

Other images: Getty

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