Married? Your Credit Score is Still Single

It’s natural for newly married couples to want to share everything, from a bucket of popcorn to a bubble bath. But should you share all of your financial accounts as well?

Well, if by "share" you mean "discuss at great length with your significant other," than yes, absolutely. One of the most common reasons for divorce, as you may already know, is money. Not the lack of it, necessarily, but the lack of open and honest communication about it. Ideally, you and your partner will know every last dirty detail of each other’s finances.

But what about sharing bank accounts, credit cards, and other loans? Well, there is no right or wrong answer to this question. Below we provide some things you should keep in mind before setting up joint accounts.

Joint bank accounts

When two people meet at the alter, both have arrived there maintaining their own financial independence. Many financial experts, including Katherine Pickard, a Toronto investments counselor, believes that keeping individual bank accounts is advisable for pay cheque deposits.

A healthy marriage financial plan, according to Ms. Pickard, includes a joint account in which monies are deposited by both individuals to cover utility bills, rent, mortgage, or other shared financial responsibilities. She asserts that there are two positive reasons to have a joint account. The first is that it promotes the idea of "the couple," the way it should be in a marriage. The other reason, she stresses, is that "in the event of a break up, when someone decides to ‘clean out’ the bank account, the funds that can be taken are minimal."

Joint credit cards

There are pros and cons to sharing a credit card. If one partner enters a relationship with a bad credit rating, they can use their significant other’s strong credit to help rebuild their own by becoming an authorized user on their credit cards, or opening new cards together. However, if the partner continues poor spending choices and misuses the card, then the other partner will be forced to make the payments in order to protect their own credit rating.

Joint credit cards can aid in simplifying bill payments and budgeting. The monthly statement allows you to see how much is being spent. This is also beneficial when the chosen credit card offers excellent rewards. Heather James, a bank manager for CIBC, advises that those who are responsible with money can make all their purchases and pay all their bills with their credit card, therefore building rewards at a very fast rate. She asserts that "both individuals in a marriage must be very good in managing their finances and pay the balance off in full every month, otherwise there will be serious trouble." She goes on to say that there must be good communication between a couple in order for this to work effectively.

It's important to remember that credit card issuers will not let you out of a signed contract on a joint credit card when you and your partner separate, if there is a balance owing on the card. That outstanding balance must be paid off before any changes can be made to the account.

Your credit score is your own

No matter how "joint" you and your honey are, remember that each of you still has a credit score in your individual names. There is no such thing as a joint score. So it’s very important for women and men alike to protect that 3-digit number, married or not. 

Also, you both need to be diligent in maintaining good individual credit ratings if you plan to share a mortgage or loan. A bad credit rating from one partner will make it much harder to achieve common financial goals like buying a house.

Should you break up...

Although there are few studies to prove it, financial infidelity is a common and serious issue that plagues many couples. Family law specialist Jennifer Brandt sees more divorces caused by financial infidelity than by sexual infidelity. And GMAC, a finance company, discovered that out of 2,800 surveyed households, one-third of the spouses admitted to hiding at least one purchase from their partner.

Should your marriage break down due to financial infidelity or other causes, you’ll quickly realize that separation isn't just about splitting up assets – it includes dividing debts as well!

Who’s responsible for debt?

• In most provinces and states, any debt that was incurred prior to the marriage by your spouse is your spouse's responsibility.
• Any debt incurred throughout the relationship—including individual loans or credit cards that can be attributed to the maintenance of the household or necessities—are considered shared debts during a divorce.

So protect yourself and avoid financial disaster by keeping a watchful eye on the household finances, no matter how long you’ve been married. We all want that "happily-ever-after," but airing on the side of financial caution is a smart insurance policy in case things should go bad. After all, your credit score is your own—for better or worse.