26-Sep-2018 written by : FSI-Team
A big part of getting married is making financial decisions together. Once you get married it is prudent to realign your financial goals in a manner to meet your joint financial ambitions. For instance, you may be planning to take a joint home loan to build your nest together. However, dreams such as these may get derailed if your spouse’s credit score is not up to the mark. Read on, to find out more.
First up, you need to know that your credit scores or CIBIL reports are not synced after your marriage. In fact, till such times you opt for individual lines of credit and are servicing them independently, there is no impact on your own personal credit profiles. After marriage you can continue to repay debt on your existing credit as usual.
Your credit profiles come under joint scrutiny only when you apply for a joint loan such as a home loan. When both spouses are working, it is indeed recommended that you opt for a joint loan, as it enhances your eligibility and reduces the burden on any one of you. If you apply for a joint home loan, any prospective lender will go through your individual CIBIL report and CIBIL score to assess your creditworthiness. If one of your scores is not up to the mark it is likely that your home loan application will not go through.
Assuming that none of you have a problem with your CIBIL score, it is likely that you are at a vantage position and may even get an attractive home loan interest rate, on account of a good score. Once you have applied for a joint loan though, you become equally liable for the loan. This means that if one of you misses a payment or two, it will reflect equally poorly on both your CIBIL scores. On the other hand, if you are making regular repayments on a long term loan such as a home loan, both of you receive a credit boost. As mentioned earlier, a good credit score is a barometer of good financial health and is translated as credit responsibility by lenders. Servicing your joint loan responsibly can translate into an opportunity to build credit history together.
If you discover that your partner's score is poor at the time of a joint loan application, that in turn has resulted in loan rejection or availability of a loan at a higher home loan interest rate from a non-traditional lender, do not get upset and let it affect your marriage. Think of it as one of the many instances you will have to tide over life problems together. Put your heads together and see how best you can work towards a resolution to the debt situation at hand. For instance, if your outstanding credit card debt is high, you may think of liquidating some assets to pay off this debt. You may consider pooling your resources together to do so.
If the above is not an option for you, you may opt for a personal loan for a low CIBIL score that you can use as a debt consolidation loan. There are twin advantages of a debt consolidation loan. Firstly, it helps you to overcome the debt situation you have at hand. Secondly, regular repayment of this kind of loan will help your restore your credit score over time.
Lastly, if one of your credit scores is low, it is better to put your investment decision on hold till such times both of your CIBIL scores are satisfactory. This will act as a reasonable assurance that your loan application goes through smoothly, and you can avail the credit line you wish for at an attractive rate of interest.