When you’re considering applying for a personal loan, many people wonder: ‘Can my partner’s debt impact my credit score?’ This is when understanding how credit scoring works is essential. We explain how partner debt interacts with credit scores, what factors lenders look at, and what you can do to protect your credit score standing.

What is a Credit Score?

A credit score is a numeric ranking of your credit history. In New Zealand, credit reporting agencies (like Centrix, Equifax, Illion) collect information about your borrowing and repayment behaviour. They look at things like whether you’ve missed payments, whether you currently have outstanding loans, credit cards, or other lines of credit. The better your past record, the higher your credit score will be.

Credit scores are very important when you apply for a personal loan, especially unsecured loans, as they help lenders decide:

Whether they will approve your application.
The personal loan interest rates you’ll be offered.
The amount you can borrow and the repayment terms.

Does My Partner’s Debt Affect Me?

The short answer: generally, no, not unless you are directly tied into that debt (for example a late payment on a joint home loan). Here are key things to understand.

Individual Credit Applications

If you apply individually for a personal loan, or another credit product (like a credit card, car loan, or unsecured loan), the lender will look at your credit history and score only. Your partner’s debts will not affect your application, your credit score, or the interest rate you’re offered.

If your credit score is strong, you have a good record of repayment, and low existing debts, that will work in your favour, regardless of what debts or negative financial behaviour your partner may have.

Joint Applications or Co-Borrowers

If you apply with your spouse or partner as a co-borrower or guarantor, and they have poor credit history, you may well be impacted. In these cases:

The lender may consider both people’s credit histories.
They may use the lower of the two credit scores, or factor both sets of financial obligations when determining risk.
If your partner has high debt or a poor credit history, that could affect how the combined application is viewed, possibly resulting in less favourable personal loan interest rates, or even rejection.

Shared Debt or Guarantees

You might also be impacted if:

You have jointly held accounts or loans with your partner. Joint credit cards, mortgages, or other shared financial products mean both names are on the liability.
You have guaranteed a loan for your partner. If they default, that could affect you, and potentially your credit score.
There’s shared responsibility in financial agreements (e.g. joint business debt) as these can show up on credit reports associated with both parties.

What NZ Lenders Consider When Assessing a Personal Loan

To better understand how your credit score is determined, and what might affect it, here are the main factors lenders evaluate when you apply for a personal loan:

Credit history – any defaults, missed payments, or bankruptcies on your record.
Current debt levels – other loans, credit cards, and obligations.
Income and employment – steady income improves chances.
How long you’ve had credit – a longer, stable history often helps.
Credit utilisation – how much of your available credit you’re using.

If your partner has debt, but it isn’t something you’ve signed for or guaranteed, it normally doesn’t show up in your credit assessments.

How Partner Debt Might Indirectly Affect You

Even though partner debt generally doesn’t affect your credit score directly, there are some indirect ways it could:

Financial stability: If you share bills, household expenses, or are pooling incomes, a partner with high debt could strain shared finances. That could make it harder for you to make payments consistently, which would affect your credit score.
Joint expenses & reputation risk: If your partner defaults on something that you share (a joint account, co-signed loan), it could negatively affect you too.
Lenders’ perception of your application: In a joint loan or co-signed loan, lenders look at the total obligations of both people. So your partner’s debt will be a factor in this scenario.

What You Can Do to Protect or Improve Your Credit Score

If you’re considering applying for a personal loan or unsecured loan, here are some steps to make sure your credit score is as strong as possible:

Only apply for credit when you need it; too many applications in a short time can hurt your credit score.
Make all existing payments on time (credit cards, bills, loans).
Keep your credit card balances low relative to credit limits.
Avoid taking on joint debt unless necessary.
If you are jointly applying for debt, make sure your partner also has strong credit or works to improve theirs.
Shop around for the best personal loan deals by comparing interest rates, fees, and terms.

Common Questions about Partner Debt

Q: If my partner has a default on their credit file, will it show up on mine?
A: No, unless you are jointly responsible for the debt, or you’ve signed as a guarantor or co-borrower. Defaults are tied to the person who took on the debt.

Q: What happens if I want to do a joint personal loan application?
A: Then both credit histories may be reviewed and considered. Some lenders take the lower credit score, some consider both. You’ll likely face stricter checks and possibly higher interest rates.

Q: Will having a partner with poor credit make my loan interest rates worse?
A: Only if you are applying together or you’ve taken on joint obligations. If you apply in your own name only, lenders will only look at your financial profile.

Personal finance advice

Unsure of how to manage your money? You can access free personal finance services or pay for professional personal finance advice.

How much can you borrow with a Nectar Money Personal Loan?

With Nectar Money you can borrow unsecured up to $40,000, or as little as $2,000. Use our loan repayment calculator to find out how much you could get.

Getting started with Nectar Money

Do you need a great rate on a personal loan? We’d love to help with your personal loan requirements. Find out how much you could borrow and learn more about our personal loans. You can get started with Nectar Money and get a personalised loan quote online which will include your interest rate, maximum borrowing amount and repayment options.

Nectar Money – we make lending sweeter.*

*Nectar Money’s lending criteria and responsible lending checks apply.