If you or your partner has a bad credit score and you’re at the point of buying a house, moving in, sharing expenses and starting your life together, getting a loan can be a more challenging task than if you both had “rocking good” credit scores.

Often, one person will have a higher credit score than the other. While this can make the experience a whole lot easier, the person with the higher score should take a few precautions to make sure their credit rating isn’t jeopardised.

Whether you want to apply for a loan to own a home, buy a car or start a family, it is very important that you or your partner maintains their good credit score. So to do this, here’s what you need to do.

Understand why you or your partner have bad credit.

We will start off by saying bad credit scores happen for a lot of reasons and often to people who are very responsible and cautious with finances. Such reasons can be from past actions, unexpected financial hardship, consumer debt or even identity theft, it is important to understand the reason you or your partner have the credit score you do.

So you need to make this one of the first questions asked as it will direct what you should and shouldn’t do when it comes to getting a loan. Also it is going to help you along the way when it comes to improving both of your credit scores.

For example if the bad credit score is due to unexpected medical bills, then you or your partner won’t be seen as being complacent with your money and your next steps will be a lot different than if the score is due to over extending financial commitments or poor money management skills.

Avoid getting a joint loan:

If you’re both ready to apply for a loan and buy a home, the one with the higher credit score may be better doing this on their own rather than applying for a joint home loan. In the case that you applied together, the presence of a poor credit score could in fact lead to higher interest rates, poor loan terms and at times even outright rejection to your application.

Lenders will look over your entire financial history to determine whether you can qualify individually, so make sure your income and assets are substantial enough to ensure you don’t get yourself into any hardships. Remember, if you’re applying for the loan individually, it is your signature on the documents so if one day you were to split up the responsibility will automatically fall to you. Again this is an issue faced by a lot of Australians every year and while it is not a topic many people like to discuss, it is important to go into with your eyes completely open.

Turn the bad credit around:

If you’re the one with the higher credit score, it is in your best interest to work with your partner to improve their credit score so you can both make financial decisions in the future and you can eventually apply for larger loans. Once you understand the reason for the poor credit score, you can make a plan and take the steps to improve it.

Keep in mind that your bill payment history contributes to 35% of your credit score, so if you’re the one with the good credit score make sure you are leading by example and reminding your partner to pay their bills on time each month.

Another step you can take to improve your credit score is to apply for a secured credit card. Available at many banks and credit unions, this card was designed for those who can’t qualify for a regular loan due to their credit history and allows you to load your own money so you’re only spending what you put down.

If you do find yourself in the situation where either you or your partner have a bad credit score and the other doesn’t, the best thing for you to do is to keep your finances as separate as possible in the short term until you can gradually improve them. If you need a loan now look at applying for specialist lenders or take the steps required to improve the bad credit score now to make things easier for the future.

Remember, bad credit scores happen to the best of people. As long as you know about them, then that is the first step to turning them around and figuring out a way forward together.