You can get your own credit card based on your spouse’s or partner’s income, especially if you don’t have any income of your own. And they do not have to be an authorized user on the account. Having a credit card in your own name can help build your credit.
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If youre not currently working, you can use your spouses or partners income on your credit application. This can help you get approved while still having a card in your own name. Heres what to consider before doing so.
When applying for a personal loan you may be wondering if you can include your spouse’s income on the application, even if they are not actually applying for the loan themselves. The answer is – it depends. There are certain circumstances where you can use your spouse’s income when applying for a loan but you can’t simply claim their income as your own in most cases.
Why Creditors Look at Income
When you apply for any type of credit, whether it’s a credit card, personal loan, mortgage, or auto loan, the lender wants to determine your ability to repay the debt One of the main factors they look at is your income – how much you earn determines how easily you’ll be able to make the required payments
Income isn’t reported on your credit report, so you have to verify it on the application itself. Lenders want to see reliable, verifiable income that demonstrates you can handle the new monthly payment.
Types of Income You Can Use
In most cases, you can only list your own personal income on a loan application, meaning the money you earn from your job, side gig, investments, etc
However, there are a few exceptions where you may be able to include your spouse’s income:
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If you have joint assets or shared finances with your spouse, some lenders may allow you to include their income as well, since their money contributes to the household finances.
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If you apply for a secured loan using a jointly owned asset as collateral, like a car or house you co-own with your spouse, you may be able to use their income to qualify.
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If your spouse is willing to apply as a co-signer or joint applicant, their income can be used to qualify for the loan.
When You Cannot Use Your Spouse’s Income
As a general rule, if you’re applying for a personal loan in only your name, you cannot list your spouse’s separate income on the application without their knowledge or consent.
Here are some key things to keep in mind:
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You cannot use your spouse’s income instead of your own. Lenders want to see you can qualify based on your own earnings.
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You cannot combine your income with your spouse’s income unless they are a co-applicant.
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Even with permission, you cannot claim your spouse’s separate income as your own.
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For joint expenses like mortgage payments or auto loans, you can only list the portion you personally pay.
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Child support and alimony may be garnished from your spouse’s income, but it is still their income, not yours.
Frequency of Entities:
spouse’s income: 7
your spouse’s income: 3
their income: 2
your own income: 1
your spouse: 1
your own earnings: 1
their money: 1
their knowledge or consent: 1
your income with your spouse’s income: 1
your spouse’s separate income: 1
When to Apply with a Co-Borrower
The only way to fully utilize your spouse’s income for a personal loan is to apply together with your spouse as a co-borrower (or co-applicant). This makes you both equally responsible for repayment of the debt.
Adding a creditworthy co-borrower often improves your chances of approval and may allow you to qualify for better loan terms. Benefits can include:
- A higher loan amount, since your combined incomes are considered
- A lower interest rate, due to decreased risk for the lender
- Improved chances of approval if you have limited credit history
However, there are risks – if you fail to repay, it can negatively impact both of your credit scores. Your spouse should only co-sign if they are confident you can make the monthly payments.
Before applying with a co-borrower, have an open conversation about expectations. Make sure you both fully understand the responsibility you are taking on, and your shared ownership of the debt.
What Documentation Do You Need to Provide?
When you apply for a personal loan with a co-borrower, be prepared to provide documentation to verify both incomes.
Typical income documentation may include:
- Pay stubs covering the last 30 days
- W-2 and tax return from last year
- Written verification of employment from your employer
- Proof of assets if you rely on investments or savings
Lenders may also ask for photo ID, proof of address, Social Security number, and other information from both co-applicants. Be sure you can provide all required documents upfront to avoid delays.
Applying with a Non-Spouse Co-Borrower
Spouses most often become co-applicants for loans, but you can potentially apply with any other willing co-borrower as well. This could include:
- A parent or family member
- A domestic partner or significant other
- A trusted friend or roommate
The same rules apply – the co-borrower must provide their financial information and is equally responsible for the loan. Make sure you choose someone reliable that you share finances with or have a history of managing joint accounts well.
How to Decide if You Should Use a Co-Borrower
Before deciding if a co-borrower is right for you, consider these key factors:
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Will your own income and credit score qualify you for affordable loan terms? If so, applying solo may be better.
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How much can you afford just from your own income? Using a co-signer for more than that means greater risk.
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How committed is your relationship? Co-signing ties your financial reputations together.
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Do you completely trust the other person? You are vouching for each other’s reliability.
Weigh the risks and rewards carefully first. In many cases, taking some time to improve your own credit or save up a larger down payment on your own may be the wiser choice.
Consulting Your Spouse Before Applying
If you are married and considering using your spouse as a co-borrower, it’s essential to consult them first before submitting a joint application.
Be upfront about:
- Exactly why you need their income to qualify
- How much you are seeking to borrow
- How long it will take to repay in full
- What the monthly payments will be
Provide information on the loan terms and conditions so your spouse can make an informed decision about co-applying. Don’t apply jointly without their consent.
Remember, you are asking your spouse to take on equal responsibility for your debt. Make sure they are fully on board first, so there are no surprises or misunderstandings.
The Takeaway
While you can’t arbitrarily claim your spouse’s income as your own, there are situations where you may use their income to qualify for a personal loan. The best way to fully utilize your spouse’s financial information is to apply together as co-borrowers. This gives you a better chance of approval, allows you to borrow more, and could mean scoring a lower interest rate. Just make sure your spouse is aware and actively consenting, since they will be equally accountable for the new debt.
The Benefits of Having Your Own Accounts
Depending on how you split your finances, it may seem unnecessary for you to have your own credit card granted based on your spouses income. However, there are some major benefits to having a card in your own name, even if you dont currently have an income.
Consider these benefits when deciding whether or not to apply for your own card using your spouses income:
- Build credit in your own name: Even if you are not earning money currently, building your credit is still an achievable goal. You have your own credit report separate from your spouse even if you share finances. By getting an account in your own name, you can improve your own credit score.
- Access to credit in case of emergency: Having your own credit card, savings or other financial account can keep you solvent even if something happens to your spouse. When a spouse dies, accounts in their name only may be frozen while the probate process is underway. Sudden separations or hostile divorces may restrict access to previously shared accounts.
- Financial privacy: Having access to a card where you can make purchases privately may also be important to you. Whether you wish to be able to keep holiday presents a secret or simply want to use your spending money without oversight, having your own credit card is a reasonable desire.
Does My Spouse’s Income Count on My Credit Application?
Your spouses income can count on your individual credit card application. You must have reasonable access to your spouses income, such as sharing a joint bank account or splitting finances.
If you are currently unemployed, you can use your spouses income alone on your application. If you do have your own income, but want to be approved for a higher limit or get better odds of approval, you can include your familys total income.
Even if you use your spouses income to get approved, they dont have to be an authorized user on the card. You also dont have to be legally married, but rather partners with reasonable access to that shared income.
There is one exception: If you are under 21, you wont be able to use your spouses or partners income on a credit application. Instead, you will be considered based on your own individual earnings. But if you need a cosigner, you can have someone 21 or older cosign, including your spouse.
Can I Use My Spouse’s Income On The Loan So I Get Approved? (First Time Home Buyer Tips and 2023)
FAQ
Does my husband’s income count as my income?
Can I use my spouses’ income on a car loan?
Does household income include your spouse?
Can I use my spouse income to apply for a credit card?
Can I borrow money from my spouse?
If you want to borrow a large amount of cash but need to prove additional household income, your spouse may be able to help. You cannot simply list a spouse’s income with, or instead of, your own if you apply in your name alone. However, you can list their income if your spouse agrees to become a “co-borrower” on the loan.
Can a spouse’s income be included in a loan application?
Basically one person submits the application, the other includes their salary in the “additional income” field when filling out the loan. 09-17-2010 05:57 AM Re: One can include a spouse’s income without having him/her on the loan application? Huh?
Can I use my spouse’s income to get a personal loan?
You cannot simply use your spouse’s income or your combined household income, even with their permission, when applying for a personal loan in your own name. Now for the good news. If your partner has a strong credit history and income, they can become a secondary “co-borrower” on the loan.
Can a low credit spouse apply for a home loan?
That means the spouse with good credit could apply for the home loan on their own and supplement their income with a portion of their partner’s income to boost their borrowing power. Since the low-credit spouse is not on the application, their poor credit score would not affect the loan eligibility or interest rate.