While your credit score won't be affected by your partner's credit history, it can impact any loans you apply for together. To make sure it doesn't, here's what you can do.
If your partner lacks a credit history, then applying for a credit or store card will help to establish one.
Another way to establish credit history is to add your partner as an extra cardholder on an existing credit card.
Because utilities are also part of your credit history, establishing these accounts in joint names should also help build a credit history.
These simple acts and making sure all utility bills are paid on time will create a postitive credit record.
Find the right lender
Even if your partner has had previous instances of credit defaults or late payments, borrowing may still be a possibility.
There are lenders, like Liberty, prepared to consider a borrower’s whole story and assess the circumstances surrounding prior difficulties when looking at an application.
If you can show strong savings habits over time, or recently improved repayment behaviours, this can also help mitigate the impact of past credit history issues.
Go it alone
Applying for the loan on your own is another option, but comes with risks.
Even though funds from your partner will help build up a larger deposit, you are ultimately liable for repayment of that loan if it is in your name.
After all, if the partnership or marriage ends and the debt is in your name, then it will be you that the lender holds accountable for the loan.
Another downside to applying on your own is that the lender will only consider your income in determining how much you can borrow. This is likely to limit your loan amount and what you can spend on your dream home.
For tips on buying a property with a significant other, read our blog here. And if you think your partner’s credit history could be a hurdle in your search for a home loan, speak to Liberty Adviser today.