Picture this: Just like most Aussies out there, a Sydneysider was looking forward to the idea of getting married, and purchasing her dream home with her fiancé.
Notwithstanding, when they took the leap and decided to apply for a home loan, her partner’s financial situation appeared to be an impediment in the way.
The Sydneysider was clueless about her partner’s credit rating, which she had no idea of until then. What was wrong? Apparently, her partner had massive debts because of a gambling habit that has been haunting him for years. Nonetheless, she had no idea about his past problems in addiction.
After applying for the loan, they were told of the options they had, each of them having huge interest rates – none of which they could afford.
The Sydney woman, whose profession is in sales, indicated that she would have wanted to consider a credit check before actually applying for the loan, since that might have saved energy and time, in the long run.
Although the debt of her partner didn’t prevent her from borrowing, they could no longer apply for a loan together once they were charged with sexually-transmitted debt.
The effects of your partner’s credit rating
An expert in financial counselling Fiona Guthrie explains the matter of sexually-transmitted debt as the way in which the other person is negatively affected by his/her partner’s past credit rating. It could also be conveyed as a sort of economic abuse, especially if one partner might have paid an entire debt in their name. The situation can be even more severe if the woman is carrying a baby.
For instance, if an individual with a bad credit history applies for a shared loan, the outcome may have a contagion effect.
It appears that failing to pay a bill in time can detrimentally affect one person’s credit rating. Afterwards, such occurrences may have grave consequences when it comes to obtaining loans. Additionally, if someone is, for instance, bankrupt, it will stay on one’s credit history for no less than five years.
Nonetheless, Fiona Guthrie informed us that, in the case in which your partner has bad credit record, it could affect you if you want to ask for a joined loan. She also said that in the case in which one of the partners has a bad credit history and obtaining a joined loan is a matter of urgency, they need to prove that they have repaid the debt. Concurrently, they ought to wait in order for the debt to clear.
In other words, it is implied that, if you’re planning to borrow together, both yours and your partner’s credit scores are taken into consideration.