6 things you didn’t know about shared finances

What is a financial association?

Share a credit account? Then you share credit report information too. A financial association is someone you’re linked to through joint finances or a joint credit account. There are some common misconceptions about financial associations – just sharing an address with someone or even being married to them (but not having any joint credit) doesn’t make them a financial associate.

You’ll become financially associated with someone if you:

1. Your credit report shows who you share finances with

Your credit report contains information about things like your accounts, repayments and debts. If you share finances with someone, they’ll be recorded on your report as your ‘financial associate’.

You can see who you’re connected to by checking the ‘financial associations’ section of your Experian Credit Report.

2. Marriage doesn’t create a financial association

Tying the knot doesn’t necessarily tie you to your spouse’s finances. You can get married, enter a civil partnership, move in together, and even take someone’s surname without creating a financial association on your credit report.

What’s more, marrying someone does not mean their debts become yours. You aren’t legally responsible for your partner’s debt, unless it’s in your name too or you’re their guarantor. If you do have joint finances with your partner, you’ll still have separate credit reports – they’ll just be linked to each other. Note that paying child maintenance does not count as shared finances.

3. Your financial associates can impact your ability to get credit

Companies view information on your credit report when you apply for credit, such as a mortgage or loan. This gives them an idea of how well you manage your finances, and helps them decide whether to lend you money.

Your financial associates appear on your report, and companies may check their credit history when deciding whether to approve you. This is because your financial associates may affect your ability to repay debt. For example, if your partner’s been made bankrupt, companies may be concerned that you’ll need to help them repay their debts before you can repay your own.

4. It’s important to look after your own credit score

Your credit score reflects how reliable you are with credit and affects your ability to borrow money. Even if your financial associate has a good credit score, it’s important to look after your own. This is because:

  • If you have a low score, it can negatively affect your partner’s ability to get credit, even if you’re not applying together.
  • Companies may reject an application for joint credit (e.g. a shared mortgage) if just one of you has a low credit score.
  • If you break up, get divorced, or your partner passes away, you may need to apply for credit as an individual.

There are several steps you can take to improve your credit score, including paying bills in your name and getting your own credit card. You can check your Experian Credit Score with a free Experian account. The higher your score, the more likely you are to get credit at good rates.

5. You can get financial associations removed from your report

If you no longer share finances with your financial associate, you can ask Experian and the other credit reference agencies (Equifax and Callcredit) to remove them from your credit report. Get in touch with us, and be prepared to provide proof that your financial connection has ended.

If you’ve had a break up or divorce, but still share a mortgage with your ex-partner, we may be able to break the association between you if you’ve been living apart for more than six months. In this case, you’ll need to close all other shared finances with them, such as joint bank accounts.

6. Big life events are a good time to check your financial associations

It’s important to understand your financial associations and keep them up-to-date, as they can have a big impact on you and your connections. It’s a good idea to check them if:

  • You’re moving house or buying your first home
  • You’re moving in with a partner, getting married, or entering a civil partnership
  • Someone close to you (who you may be finically connected with) has died
  • You’re getting a divorce, or have broken up with a partner
  • You’re looking to take out credit, such as a loan or credit card
  • You want to change banks, utility suppliers, or your mobile phone provider

You can find your financial associates on your Experian Credit Report. If you want to be able to check your report regularly, and receive report alerts to certain changes, consider getting a CreditExpert paid subscription.