Whose credit score is used when buying a home with a spouse?

Question:

I’m looking for some financial advice. My wife and I want to buy a house and we’re just getting started with our careers and making pretty good money. However, she has an 800 FICO score and I have a 648 FICO score. Reason for my low score is I had two auto loans that I stopped paying when I was young and stupid. One of them is set to expire next year and the other is four years out. So I’m wondering if we’re trying to get an FHA loan, which score will be used and will a credit score of 648 possibly get us qualified for a loan? Separately, should I pay off these loans? How long will the payment delinquencies last?

Answer:

Lenders will use the lowest mid credit score of all borrowers. So in your case it would be yours, but 648 is not that bad. You can qualify for an FHA loan with scores down to a 580 so I wouldn’t pay off the cars to boost up your credit score. Also, you mentioned restarting the clock. That’s not quite how it works. Any derogatory credit will remain there seven years from the date of first delinquency, meaning the first time you were late. It won’t restart the clock if you paid those balances.

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