If you get declined for a loan or credit card, you will no doubt be wondering why. You may even blame a housemate whose financial situation isn’t fantastic influencing a lender’s decision because you share an address. But, doing that means falling for one of the most common misconceptions about credit – that who you live with affects your credit score.
In reality, the only way another person can impact your ability to get credit is if you have a joint account with them. A joint bank account, loan, or mortgage is known as a financial association.
Financial association
Just living with somebody doesn’t count as a financial association. Neither does being named alongside someone else on any of your household bills, like electricity, or broadband. Even being family doesn’t count as a financial association unless you share a joint account. If you keep your finances completely separate and have all your own accounts, then it doesn’t matter how many people you live with. They won’t have an impact on your ability to get a loan if and when you need it.
If you do share a financial association with somebody, you can find out more about how that can impact your ability to get credit in our jargon-buster article on financial associations.
So there you have it. Just by sharing an address with you, your housemates aren’t affecting your chances of getting the loans you need. But what is? Get more tips on cracking credit from our Money Savvy articles.
