Married couples facing debt problems sometimes look to debt consolidation loans as a possible solution. While a debt consolidation loan has an impact on your credit report and credit score, the impact it has on your spouse's credit depends on several factors. Debt consolidation loans should always be entered into with caution, and only after carefully considering the terms and possibilities.
Credit Reports
Your credit report is a collection of information about your behavior as a credit use. These reports exist for everyone who has ever used credit, though the information is collected for each individual, not for couples. Both you and your spouse have your own credit reports and your own credit scores based on those reports. Your spouse's individual credit behavior is not listed on your credit report, nor is yours listed on his.
Joint Debts
Getting married usually involves some kind of shared financial and credit interests. For example, if you and your spouse take out a joint mortgage, both of your credit reports will have information about the mortgage and your history of the loan payments. In these circumstances, both spouse's credit reports indicate the same information, and the actions of one can affect the other. Similarly, if you and your spouse take a joint debt consolidation, this too will be reflected on your credit report.
Debt Consolidation
When you consolidate your debts, you use a single loan to pay off several other loans. After you pay off the old loans, you then have a single loan, which you must repay. Debt consolidation is notorious for offering a quick fix, but often ends up hurting debtors in the long run. If you have a joint consolidation, both of your credit scores will be affected by the loan.
Post Consolidation
Even if your debt consolidation has no immediate impact on your spouse's credit score, your spouse's credit can still be affected by later events. For example, if you and your husband take out a consolidation loan together, a failure to repay the loan will hurt both your scores. If your husband takes out the loan alone, your score is generally not affected by his inability to pay it back. However, if you are forced to go into debt to help him pay, his consolidation can end up hurting your score.
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