How does marital status affect credit?

What happens when a married couple applies for a car loan and one spouse has decent credit, while the other’s score is less-than-desirable? Well, if an individual applies for a loan, their spouse’s credit should have no effect on the application process.

The government set up the Equal Credit Opportunity Act for just such situations. This act protects the privacy of individuals when it comes to marital status as well as factors like race, sex, age and nationality. According to the Federal Trade Commission, creditors cannot reject your application or alter the terms of a loan based on any of these factors.

However, in community property states, creditors are allowed to ask about an applicant’s marital status. These states – Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin – consider any property acquired during a marriage as owned equally by both parties.

Applying for a joint loan changes the rules, and creditors are allowed to inquire whether a couple is married, unmarried or separated, but they are not allowed to use terms such as “widowed” and “divorced.”