In these economic times, it is not uncommon for two people to get together that are on opposite ends of the spectrum in regard to credit ratings.
If one person has exceptional credit and the other has a lower rating with some black marks, it is only normal to want to know how that will affect any joint purchases.
While there is no one real answer here, we do have some ideas that might help.
When applying for a rental property, there is no definitive answer to this question at all.
The reason for this is that every landlord has their own procedures for checking possible renter’s reports.
Some may overlook one person’s past if their recent credit history is okay, while others may require a larger security deposit to ensure they are not left without payment.
It can get a bit more challenging when it comes to making actual joint purchases. For instance, buying a home together would more than likely result in a higher interest rate or other unfavorable terms, such as a shorter payback time or more points during settlement.
If the person with the better credit history can afford to make the purchase on their own, they may be better off doing so and then drawing up legal documents noting the other party’s right to a percentage of the property.
If it is credit cards that the couple is after, a low-interest card may be out of the question. The person with the better credit has no benefit whatsoever of having the lower credit rating cosign the papers for a credit card with them.
However, even though an interest rate may be higher, the person with the lower credit rating may be able to secure otherwise unattainable credit by having their partner with the better credit rating cosign an application for them.