After You Say ‘I Do’ — Bad Credit, Your Spouse and Home Buying

How to buy a house with bad credit

This post was contributed by our Financial Literacy Movement partner

Deep breathes… The marriage of your spouse’s bad credit with your good credit is not an unsuitable match, and buying the home you want, together, is still within your reach.

First, before you begin chastising the love of your life for ruining their credit, remember that after the financial collapse of 2008, few Americans were left unscathed by the credit crunch. In fact, most American families find themselves in precarious financial situations these days — so know you are not alone.

We’re All in the Same Boat


How to Buy a House With Bad Credit

Now that you know you and your spouse aren’t the only ones struggling with this problem, consider these options for buying a house when your spouse’s credit is less than desirable.

1. Buy it Together Anyway: You can always ignore your spouse’s bad credit and buy the house together anyway. An admirable plan that will certainly result in a corresponding high interest rate and not something any personal finance experts would advise.

Related: You Can Still Buy a House When Your Spouse Has Terrible Credit

2. Go it Alone: If your husband or wife’s credit score isn’t cutting the mustard, you can always secure your home loan alone. This, depending on your income and available cash, may limit your home purchasing options because of limited income. The good news is securing a loan will be easier when you put your good credit to work.

Building Wealth

3. No-Income Verification Loan: This gives couples the opportunity to purchase the house they want without being constrained by either the single income of the good credit holder to secure a mortgage, or the bad credit of the participating spouse. These types of loans require a much larger down payment (usually 25 to 30 percent of the principle). And we hate to be the bearer of bad news, but the financial collapse has almost entirely eliminated this option.

4. Replace the “Bad” Credit with “Good” Credit: In times of crisis, it is everyone’s hope that our families may be able to help us weather the storm. Couples purchasing a home can enlist a third party, usually one of their parents, to co-sign a new house loan. By replacing the bad credit holder with a third party enjoying excellent credit ratings, couples can have access to the loans they need for the house they want. is the place to get a complete understanding of your credit report and score and take specific action to improve your financial health.

Financial Literacy

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GOBankingRates Staff

These articles are written by the in-house GOBankingRates team.

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