How is Credit Score Calculated for Married Couples?

Getting married is a big life event that not only leads to several professional and household alterations but also invites a plethora of financial changes.

One question that many newlyweds in the UAE may have is does their credit score change when they get married? Will the score still be an individual one based on one’s credit habits? Will it get combined for the couple getting married? What will the new score look like?

And many more!

In this article, we shall reflect on all of these questions and explore how credit scores are calculated for married couples in the UAE in detail.

An Overview of Credit Scores in the UAE

Before understanding how credit scores are generated for married couples in the UAE, let's first understand what a credit score is. A credit score is a three-digit number that represents your creditworthiness. It's calculated as per your credit history and current credit usage.

In the UAE, credit scores range from 300 to 900. The equation is fairly straightforward — the higher the score, the better creditworthiness.

Lenders, banks, and other financial institutions use credit scores to decide on the approval of your application for credit such as a loan or credit card. Furthermore, your credit score can also affect the interest rates and terms you're offered.

How is Credit Score Calculated for Married Couples in the UAE?

In the UAE, credit scores are calculated on an individual basis, regardless of your marital status. Simply put, each spouse will have their own credit score based on their individual credit history and usage.

However, there are some cases where a couple may have a joint credit account or loan. In this case, both spouses will be responsible for making payments and the credit history will be reflected on both of their credit reports. So if the joint account or loan is in good standing, it can have a positive impact on the credit scores of both spouses.

On the other hand, if the joint account or loan is in default or payments are missed, it can have a negative impact on both spouses' credit scores. This is because both spouses are equally responsible for the debt.

It's important to note that even if you're not legally responsible for a debt, it can still affect your credit score. For instance, if your spouse has a credit card that's in their name and they default on payments, it can still show up on your credit report if you're an authorised user on the card.

Does Your Credit Score Change When You Get Married?

As we mentioned earlier, getting married doesn't directly affect your credit score. Your credit score is based on your individual credit history and usage, irrespective of your marital status.

With that said, there are some ways that getting married can indirectly affect your credit score. For instance, if you and your spouse decide to apply for a joint loan or credit card, the lender will look at both of your credit scores when making a decision. In this case, if one spouse has a low credit score, it can affect the overall chances of being approved or the interest rate that you are offered.

Another way that getting married can indirectly affect your credit score is if your spouse has debts or financial issues that you're not aware of. For instance, if your spouse has a major credit card debt that they haven't disclosed to you, it can affect your financial situation as a couple and potentially lead to missed payments or default on debts.

To avoid any surprises, it's important to have open and honest conversations about your finances with your spouse before and after getting married. This can include discussing your credit scores, debts, and financial goals as a couple.

Easy Tips to Improve Your Credit Score as an Individual

Here are some quick tips that you can follow to improve your credit score over time -

• Pay your bills on time: Your payment history plays a crucial role in the calculation of your credit score. It is advisable to pay all your bills, related to credit card bills, loans, and other debts, on time.
• Maintain a low credit utilisation ratio: Your credit utilisation ratio is the amount of credit that you are using at the moment against the total amount of credit available to you. It's best to keep this ratio below 30%.
• Monitor your credit report regularly: Check your credit report at least once a year to make sure that all the information is accurate. If you spot any errors or inaccuracies, immediately report them to the credit bureau.
• Use credit wisely: Avoid taking on too much debt, and use credit only when you need to. Don't max out your credit cards or take out multiple loans at once.
• Avoid frequent credit applications: Each time you apply for credit, a hard inquiry is made. This inquiry on your credit history can impact your credit score negatively if done multiple times within a short span. For this reason, you should only apply for credit when you really need it.
• Keep credit accounts open: The length of your credit history is also another key factor with respect to your aecb credit score. It is advisable to have your credit accounts open, even if you're not using them actively.
• Consider a secured credit card: If you have a poor credit history, consider getting a secured credit card. These cards require a security deposit, which serves as collateral and can help you build up your credit history over time.

Important: As improving your credit score takes time and effort, be patient and consistent in your efforts to improve it.

Does Changing Your Name After Marriage Affect Your Credit Score?

Another important question that most people are confused about is whether changing their name after marriage shall affect their credit scores.

Well, changing your name after marriage should not have any direct impact on your credit score in the UAE. However, it's important to update your personal information with your creditors, banks, and credit bureaus to ensure that your credit history is correctly recorded under your new name.

Besides loans and bank accounts, you should also make sure that the changes in name are reflected in your essential documents like Emirates ID, passport, and so on. It's important to do this as soon as possible to avoid any confusion or errors in your credit report.

Additionally, if you have any joint accounts or loans with your spouse, it's important to ensure that both of your names are correctly recorded on those accounts.

Overall, changing your name after marriage should not negatively impact your credit score, as long as you take the necessary steps to update your personal information with your creditors and credit bureaus.

Improving Your Credit Score as a Married Couple

If you and your spouse want to improve your credit scores, there are several steps you can take. First, make sure you're both aware of your credit scores and credit history. You can check your credit report from the al etihad credit bureau. 

Note that you can also check your credit score range for free on Policybazaar.ae.

Once you know your credit scores, you can work on improving them together. This can include making payments on time, paying down debts, and avoiding applying for too much credit at once. It's important to remember that improving your credit score takes time and effort, but it's worth it in the long run.

Another way to improve your credit score as a married couple is to consider applying for credit in both of your names. This can help build a positive credit history for both spouses and can lead to better credit scores over time.

If you're struggling with debt, it's important to get the situation under control as soon as possible. You can try out specific strategies to clear debts or even seek help by contacting financial advisors to get back on track.

To Conclude

As we saw, there is no direct impact on your credit score when you get married. Credit scores are calculated on an individual basis in the UAE — whatever your marital status is.

At the same time, it’s worth remembering that joint accounts or loans can affect both spouses' credit scores. Thus, while getting married doesn't directly affect your credit score, it can certainly make an impact if you and your spouse apply for joint credit.

To improve your credit score as a married couple, it's important to work together to make payments on time, pay down debts, and avoid applying for too much credit at once. Having open and honest conversations about your finances can also help you avoid any surprises and work towards your financial goals together.

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