When you apply for credit, the lender will usually consider your credit history before agreeing how much to lend you and what level of interest to charge. Every lender has different criteria for deciding whether to offer you credit or refuse your application. If you are applying for credit solely in your name and you aren’t linked to your partner financially, your partner’s credit history won’t affect your application.
If you have a joint account or credit in both your names, your credit reports will become linked. This is referred to as a financial association. If you apply for any credit once this happens, the lender will be able to see your linked financial associates.
In some cases, a financial association may be applied to your credit report even if your application for joint credit was denied. If you are both named on your utility bills, this may also result in you being linked on your credit report.
Applying for joint credit
If you are applying for joint credit such as a joint loan or mortgage, then both credit ratings are taken into consideration. If you want to apply for a joint bank account, loan, credit or mortgage, then you should be honest with each other about your credit history. If your partner has a very bad history, this could cause a problem. You may be denied the credit or be offered credit with a higher rate of interest.
You are responsible for debts in your name, including any joint debt. Even if it was your partner who spent the money, you could be held liable for any missed payments or outstanding balances. Before you enter into any joint credit agreements, be sure you can trust the other person to pay their share, or you could end up having to cover it.
Removing financial associations
If you separate from a partner, they won’t automatically be removed as a financial associate on your credit file. You’ll need to disassociate yourself to unlink your credit reports; if you don’t, it may impact your credit applications in the future. To do this, you need to pay any outstanding balances and close the accounts. You then need to raise a disassociation request with each of the main credit reference agencies – Experian, Equifax and TransUnion.
Check your credit reports
If you are applying for credit, it is always worth checking your credit score first. Even if you think you have a good credit history, there may be incorrect information on your credit file that could affect your application. If your credit score is low, try to improve this before applying for credit.
About Morses Club
Morses Club is one of the UK’s leading providers of cash loans. We assess each application in person, based on your individual circumstances. In some cases, we can offer loans to those who have been refused credit from another lender. This isn’t guaranteed but, if you’ve been considering bad credit loans, then we may be able to help.