If you are in a relationship with a person with damaged credit due to a past or pending bankruptcy, your finances and credit could be affected. Depending on your financial involvement with the man and your future plans together, you may or may not face higher interest rates, a low credit score and difficulty obtaining credit.
Bankruptcies are detrimental to credit ratings. If your boyfriend has already or is about to file for bankruptcy, your credit will not be affected. This includes if you decide to tie the knot one day. Married couples do not have transferable credit between spouses, and you will not assume his financial history. This also means that your credit score will not improve his either. Your credit score is determined only by your financial history, including any loans, credit cards, mortgages or other financial agreements in your name.
If you cosigned a loan or financial agreement together before your boyfriend filed bankruptcy, your credit may suffer. For example, if you financed a car or obtained a cell phone contract together, and the agreement defaults in your boyfriend's bankruptcy, all parties involved in the financial agreements are responsible for the unpaid debt. To avoid receiving a negative score on your credit report, pay all debts associated with your credit on time every month. Do not allow your boyfriend to discharge any of your cosigned accounts in bankruptcy.
If you plan to purchase a home together in the future, your boyfriend's bankruptcy will most certainly affect your ability to purchase a home. Though your credit may be excellent, if his is less than ideal, you could be subject to higher interest rates, fees and increased difficulty in obtaining a loan. Lenders typically blend the credit scores of mortgage co-applicants and use the average to determine which types of loans you are eligible for.
The effects of a bankruptcy can last for many years. By law, a bankruptcy will remain on your boyfriend's credit record for a decade. However, the effects of the bankruptcy are not recurring. Depending on how long ago your boyfriend filed bankruptcy, he could qualify for reasonable interest rates and some unsecured credit cards within a short amount of time. To gain trust with creditors, he should rebuild his credit with secured credit cards and by consistently paying all of his bills on time.
- Bankrupt. Businessman with empty pockets (with clipping paths) . image by Vitaliy Pakhnyushchyy from Fotolia.com