What You REALLY Need to Know Before Marrying Someone with a Bankruptcy

"Do you take this man to be your lawfully wedded husband...for better and for worse...regardless of his credit scores?"

OK, so maybe that's not exactly how most marriage vows go. But, how important are your potential spouse's credit scores in the grand scheme of things?

The first thing you need to understand when you marry someone with a previous bankruptcy appearing on their credit reports is that their bankruptcy and other bad credit will never merge with yours.

So, don't panic—you won't wake up one day and find their bankruptcy appearing on your credit reports. Credit reporting just doesn't work that way. You are two separate individuals with unique Social Security numbers, credit reports and credit scores.

All three of the credit reporting agencies in the United States store credit files on individuals—not couples. Never the two shall meet...unless, of course, you have accounts that are in both of your names. In that case they WILL show up on both of your credit reports and they WILL affect both of your FICO credit scores.

When you're applying for credit with your spouse, you need to pay attention to a few key things:

1. What it means to become a co-borrower
2. How and when to apply for credit together (also known as "joint credit")
3. When it makes sense to add your spouse as an authorized user on one or more of your credit card accounts

Marriages...bankruptcies...and mortgages...

It's a mistake to assume too much when you apply for a mortgage or new car loan.

The most common assumption is that if a person with a bankruptcy is added to the loan application as a co-borrower, the credit will automatically be more expensive. It might be. But then again...it might not be.

The best way to tackle this situation is to know all of your options. You start by knowing how to structure the deal.

How do you do this?

Simple, each of you should fill out individual credit applications.

Now, the lender can review your credit scores and advise you if you're better off submitting an individual or joint credit application to the lender.

The mortgage or auto lender should compare all your options and advise you of the pros and cons accordingly. If they don't take time to compare...take it as a sign that they don't have your best interest at heart and get a second opinion.

If you do like what the lender has to say—then take his advice and do what he recommends.

However, if you don't like what the lender has to say—then you have two choices:

1. Wait six months and work hard to increase your credit scores...then re-apply.
2. Take what you can get, even if it's a high interest rate—but use this only as your very last resort. (If then.)

There were many times my wife and I wanted something...and could have gotten it immediately (but at a higher cost). Instead, we would always wait until we qualified for the lowest interest rates and best terms.

At times it hurt. And we had plenty of arguments about waiting. But in the end, we both agreed it was for the best. It's amazing how much money just one or two extra percentage points on your interest rate can add to the cost of something over time.

Stephen Snyder is the founder of the After Bankruptcy Foundation a non-profit organization that provides free personal bankruptcy recovery advice. He has also helped thousands of people through the challenges of bankruptcy and marriage.