If you’ve taken out a mortgage, loan or bank account with someone who’s got a bad credit record, it could affect how lenders assess you.
If you’re married to or in a relationship with someone you’ve taken out credit agreements with (or if you’ve been married or in a relationship with them in the past), you could find that their credit details are linked to yours. And if they have a bad credit record, this might affect how much interest you pay when you borrow money – or even whether you’re offered credit in the first place.
Why your partner’s score matters
If a prospective lender wants to work out whether or not to give you and your partner joint credit, your file will say that you have a financial association with someone else and the credit company can link through to their file. If they have credit problems, or have struggled to pay back debts in the past, your credit rating could be affected.
If you want to check your credit score, there are three main credit scoring agencies in the UK – Experian, Equifax and TransUnion (formerly Callcredit). If you don’t want to pay to access your credit score, ClearScore* offers a free credit checking service that accesses Equifax data. They also offer free identity protection that scans for stolen passwords, security problems and fraud defence tips.
Other options include MoneySuperMarket’s Credit Monitor tool*, which enables you to check your credit score and report free of charge using data from TransUnion and offers free personalised tips to help it grow. Experian also has a free service that enables you to sign up and check your credit score with them and Totally Money offers a similar service using TransUnion data.
Before entering into any kind of credit agreement with a partner, both of you should check your scores. If your partner has a low score, try to keep your finances as separate as possible, and make sure any debt repayments they make are paid on time.
Will my credit score still be affected if we split up?
If you split up with your partner or get divorced, it’s important that you make sure that your credit file does not show that you two are still associated (or financially linked).
However, just because you split up with someone doesn’t mean your file will no longer contain the link.
In order to have the link removed, you have to create what’s known as a ‘notice of disassociation’. This involves:
Closing joint loans or bank accounts that have an overdraft facility or the ability to borrow.
Making sure that either you or your ex-partner takes over any accounts for services (such as telephone, gas, electricity and so on) that were previously in joint names.
Showing that you have an independent income.
Joint mortgages
In some circumstances, it may still be possible to create a disassociation even if you and your ex still have a joint mortgage. It’s not possible to do this if you still live in the same property, but if you were unable to take over the mortgage in your own right (or if your partner was unable to do so), the credit reference agency may still be prepared to disassociate you from your ex as long as you’ve been living apart for six months or more and all other financial links have been broken.
Separating your credit files
Once you have closed any joint accounts so that you have no financial link with your ex partner, you should contact the credit reference agencies and request the notice of disassociation.
You normally have to fill out a form, which you may be able to do online. It will ask questions about you, such as where you’ve lived over the last six years, other names you’re known by, and about your ex. It will also ask you whether you have any shared credit accounts (including joint bank accounts).
If you’re worried that your credit score has been damaged due to your financial links with an ex, our article Seven steps to improve your credit score suggests ways you might be able to improve it.