If I Marry This Person Will Thier Credit Affect My Ability to Buy a Home?
Updated: Apr 28
As a mortgage professional I cannot give you marriage advice. What I can tell you is that if you have good credit and your fiancé does not, the words "I Do” will not affect your credit score. When a couple does get married one of their goals is to save up money to purchase a home together. While saving for a home, this would be a suitable time to do a credit check up. Your credit score will not only affect your ability to buy a home together, it will also determine whether you receive a high or low interest rate. The higher the interest rate the less house you will be able to qualify for.
A credit check up includes running you credit report with all three credit bureaus. The credit bureaus are TransUnion, Equifax, and Experian. When you open a credit card, finance a car, etc. the creditor will report your payment history to one or all the three credit bureaus. What if the credit report shows a not so stellar payment history? This will more than likely result in a low credit score. But do not despair you have many ways to increase your credit score.
1. Review Your Credit Report
The first thig you should do is review the credit report for errors. Common errors you will see on the credit report are duplicate account numbers, unreported payments and open balances that have been paid off. If you notice errors on the credit report you can contact the creditor directly or file a dispute with the credit bureau that is reporting the error.
2. Pay Off Past Due Balances
Past due balances have a major effect on your credit score. You should bring all balances current.
3. Pay Off or Down Your Balances
Credit utilization also has a major effect on your credit score. It makes up about 30% of your credit score. Credit utilization is the ratio of your outstanding balance to your credit limit. If you have a $1,000 dollar credit limit and an outstanding balance of $800 you are utilizing 80% of you available credit. You should keep your credit utilization rate at 25%. When you pay off a balance do not close the account.
Once you clean up your credit it is important to maintain your credit. I always recommend to my clients that they set up auto payment on all their accounts to pay at least the minimum balance. This will avoid late payments affecting their credit score and also avoid late fees.
If you would like a free credit check up please contact me at 713-524-4242. We use what-if credit analysis tools that will show you how specific actions you take on your credit report will increase your score.
Unfortunately, unpaid collections have a major effect on your credit score and your ability to purchase a home. Recent collections can drop your credit score anywhere from 50 to 100 points. Collections remain on you your credit report for up to seven years. As the collection ages the affect on you score lessens but waiting 7 years is a long time.
Can you remove a collection from your report? If the collection is not valid you can request that it be removed. If the collection is valid, you can try negotiating a settlement amount. Contact the collector an ask them to remove the collection if you agree to pay a specific amount. The collector may say no, or they may agree to a specific amount but will not agree to remove the collection from the report. They may only agree to show a -0- balance on the report and state that the balance is paid in full. The most important thing to remember when negotiating a settlement is to get it in writing before you send the collector a payment.
About the author:
Sheldan Perry is highly skilled mortgage professional with more than 20 years’ experience in all aspects of real estate and finance. He specializes in consumer and investor financing. He can be reached at 713-524-4242.