My Credit Score is Bad But My Spouse's Credit Is Good

Reader Question: My credit score is not so good, due to some accounts I became delinquent on but later settled and paid off. My husband has excellent credit. We want to buy a home. How will my low credit score affect our home loan?

We answered a similar question about two weeks ago on the credit help blog. Actually, now that I look at it, the two questions are nearly identical. So this Q&A session should help you a lot:

Getting a Mortgage When Spouse Has Bad Credit

As the above response points out, it may be best for your husband to apply for the mortgage loan on his own. Not only will this increase your chances of getting approved, but it will also help you secure a better interest rate on the loan. And that means a smaller mortgage payment each month! If his credit score is truly excellent, he will probably qualify for the best interest rate the lender has to offer. This is the kind of position you want to be in when you apply for a mortgage.

We also did a Q&A about debt settlement and how it affects your credit score. It sounds like you're already well aware of how it can affects a score, but this one might still be worth reading.

Read the article here:
How Debt Settlement Affects Credit

Please note that this is not the only option you have available, nor am I saying it's the right one for you. That's a decision you'll have to make, obviously. These are just some things to consider. If I were in your shoes, I would have my spouse with excellent credit be the sole applicant for the mortgage loan, in order to get a lower interest rate on the loan. Then I would focus on improving my own score (if you're not already on that path).

Lastly, you might want to stop by the Bad Credit Central section of our main website. It's a work in progress, but it already has a lot of in-depth advice on how to repair a bad score.

Hope that helps you out some. Good luck with your home buying ventures. I hope it all works out for you.

-Brandon