Share a credit account? Then you share credit report information too. Sharing finances can mean you’re more linked than you think, as lenders will often look at both of your credit reports when assessing your credit.
If and when you apply for credit together, lenders will be able to see your partner’s financial information too and may use this when they make a decision about you when you next apply for credit. So we’ve put some tips to help you get up to speed with shared finances and credit.
Five top things you need to know about love and money
- Financial association means that your credit report can become linked to someone else’s through joint financial activity. This could be applying for a mortgage, opening a joint credit account, or in some cases even being on the same broadband or utility contract.
- Your credit report will only contain your financial information, but will show the name of anyone you share a financial connection with. If you share a credit application, each of you would see the other’s name in the section of your Experian Credit Report entitled ‘Financial Associations’.
- Talk about money with your partner. It might not be the most romantic of subjects, but talking about things could help you plan for the future, and avoid any unpleasant surprises. In fact, 21 per cent of people in a relationship say their partner is not fully aware of the amount of savings they have and one in 10 have not been open about their debt.*
- If things don’t work out between you & your partner, or one of the old friends you used to share an account with has run up debts, you can ask for financial links with them to be removed from your credit report (as long as you no longer share any accounts) – it’s called a financial disassociation.
- It’s best to be honest with each other about both your financial past and future goals. Shared responsibility for household bills, and working together on a regular budget, can make for a more harmonious time.
What if our credit ratings are different?
If you’re concerned that your partner may have poor credit, it’s a good idea to check your credit report to see if and how you are financially linked. By checking your credit report you can see if you are linked or not, and the steps you could take to improve your credit rating.
And if both of you check your Experian Credit Score, it could help you understand how your credit history is likely to be viewed by lenders. It can also help you both understand if one of you might need to work on their credit history a little, before any joint credit applications are made.
To get your Experian Credit Score FREE forever, sign up to CreditMatcher, a free independent service that helps you compare credit deals you’re more likely to get, based on your credit information. We are a credit broker not a lender, working with selected lenders.†
Linked or not linked?
Here’s a thing – being in a personal relationship with someone, and even having the same surname, does not link up your credit reports – and neither does living at the same address. Credit reports do however become linked if two people have actually applied for credit together, for example a bank account or a mortgage.
If you didn’t share a mortgage, a bank account or have any other shared financial arrangements beforehand, then saying “I do” at the altar is not going to have any impact. However, if you change your surname, then including both new and old names on any new application for credit creates an ‘alias’ link between your two names.
A lender would then see information in both names on credit checks it makes. It’s also worth registering to the electoral roll in your new surname as soon as possible. Remember, as long as you keep your finances completely separate, your credit reports will stay separate even if you live together or share the same surname.
(updated post, originally posted 11 Feb 2016)
*Total sample size was 2088 adults, of which 1433 are in a relationship. Fieldwork was undertaken between 12th – 13th January 2017. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
†Experian acts as a credit broker and not a lender in the provision of its credit cards and personal, car finance and guarantor loans matching services, meaning it will show you products offered by lenders and other brokers.
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