Why Is My Spouse's Credit Score Better Than Mine?

A man and woman arm wrestling.

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Here's how one partner's credit score can be higher after being married for years and sharing financial obligations.

Here's how one partner's credit score can be higher after being married for years and sharing financial obligations. 

I have a bone to pick with the credit bureaus. Yes, all three of them. I've been married to the same guy since we were teenagers, back when Aerosmith blasted through our car speakers and the Rubik's Cube was a novelty. I was married to him through years of near-poverty as we worked our way through college and celebrated small successes (and setbacks) along the way. And yet, this man -- who once called me to ask how much he earns a year -- has a higher credit score than I do.

Does this seem fair? I'm looking at you, Experian, TransUnion, and Equifax. Every single time I check our credit scores, my husband's score is higher than mine. Sometimes by 10 points or more.

If we'd met after years of each living on our own, I would understand the discrepancy. But come on -- we literally became adults together. His credit foibles are mine and my genius moves are his.

So why are our scores different? Let's take a look at how credit scores are calculated to find out.

Somewhere, in a locked room

We understand the basics of how our credit scores are derived. Roughly.

Category % of Your Score
Payment history 35%
Amounts owed 30%
Length of credit history 15%
New credit 10%
Credit mix 10%

Each credit reporting company has its own credit scoring model. I sometimes imagine a room full of credit bureau employees wearing white lab coats and deciding our credit fate.

But the truth is that each credit bureau has its own special formula. All three bureaus use slightly different measurements of the same ingredients. That's why our credit scores vary by bureau.

FICO® Scores

Back in 1989, the Fair Isaac Corporation was the first company to offer lenders a credit-risk model with a score. There were credit reports prior to that, but lenders had to wade through the complexities of those reports to figure out if a potential borrower was creditworthy. The Fair Isaac Corporation -- now referred to as FICO -- broke the credit reports down and offered a three-digit number ranging from 300 to 850 to indicate how well a borrower had managed debt in the past. The higher the FICO® Score, the better.

Today, more than 90% of lenders use it to assess risk. FICO® Scores impact nearly everything we do financially, from opening a new cell phone account to taking out loans and buying property. 

It's not a mystery

Despite being annoyed by the fact that my husband has a higher credit score, it's no real mystery as to why. We may not know the magic formula used by each credit reporting agency, but we do have a good idea of why his score looks so good.

We're careful to pay our bills on time, which is the primary reason we both have strong scores. And because we both have strong scores, I've never thought twice about him taking out a loan in his name alone.

Years ago, when we decided to consolidate our loans, it was in his name. When he bought our last car, it was in his name. He's an authorized user on the credit cards I've taken out.

I may be good about getting bills paid, but I'm less stringent about actively building my credit score in other ways. Because my spouse takes out loans in his name and pays them off, his score is boosted in three categories. He gets points for:

  • payment history (paying bills on time each month),
  • credit mix (having different types of credit), and
  • amounts owed (having more credit available than he uses).

Apart from our mortgage, the only debt I have in my name is attached to credit cards. Even though I pay them off in full each month, my score is dinged by a lack of credit mix. Creditors want to see that I can judiciously manage different types of credit. Right now, they only know that I'm good at paying off credit cards. The car and loan consolidation benefit only my husband. 

The cost of not paying attention

What's ridiculous about my lower FICO® Score is that it could have easily been prevented. How tough would it have been to apply for our loan consolidation together or add my name to the auto loan?

The fact that my partner in crime and I both have good credit has made me complacent, and complacency can be expensive. Take a look at this table showing the average auto loan APRs as of October 2019, according to U.S. News and World Report:   

Credit Score                                New Car Loan Used Car Loan

750+ 4.25% 4.17%
700 to 749 4.29% 4.19%
650 to 699 7.92% 7.37%
450 to 649 14.00% 12.76%
449 or less 18.40% 15.00%

Data source: U.S. News and World Report.

Say my credit score was 690 and my husband's was 700. Now say that we decided to buy a new car, and because we need both of our incomes to qualify, we applied for a joint loan. 

Our lender collected credit scores from both of us. Because they wanted to take as few risks as possible, they used my lower credit score to determine our interest rate. In this case, the interest rate was 7.92% rather than the 4.29% my husband's credit score would have secured.

Here's how much more it would cost to take out a five-year loan for $34,000, the average price of a new car:

  • At 4.29% interest, our payment would be $630 per month.
  • At 7.92% interest, our payment would be $688 per month.
  • Due to the higher interest rate, we would pay $3,480 more for the vehicle.

That's $3,480 down the drain, all because of a credit score that's 10 points lower. Fortunately, these aren't our actual credit scores, but they do illustrate how a small difference in credit scores can bite you in the wallet. 

An easy fix

If you find yourself in a similar financial situation and you (or your spouse) enjoy a higher credit score, there are a few things you can do to raise the lower score:

  • Apply for -- and pay off -- all of your loans together.
  • Periodically review your credit reports and make sure there's a good mix of loans. You don't want three auto loans but nothing to indicate that you can manage a credit card. 
  • Add the spouse with the lower score to a credit card held by the other. Because the added spouse inherits the credit history associated with the card, there's a nearly instant boost to the score. 

There's little reason for your spouse to have a higher credit score than you do. If you were smart enough to marry someone who's good with money, you're smart enough to hitch your wagon to their credit.

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