Did you know that major life events can affect your credit score? 

Whether you're getting married, starting a new business, or navigating a major illness, you'll experience changes in your life circumstances that could affect your credit score. This means your ability to borrow money can be impacted – both positively and negatively.

We cover six key life changes that can affect your credit score and what you can do to keep your credit score healthy.

1. The end of your relationship

A relationship breakdown, whether it be a divorce or separation, is no doubt, a challenging time. There's a lot to navigate in the separation of two intertwined lives, not to mention the emotions involved. So when it comes to your credit score, there are a few things to keep in mind:

Joint accounts

If you have a joint credit or loan account with a partner, you're both still legally responsible for making repayments. If your partner makes a late payment or misses one altogether, this could be recorded on your credit report and may affect your credit score.

TIP: Monitor repayments so you don't miss due dates. If you think you'll struggle to keep up, contact your lender beforehand to talk through your options.

Limited or no credit history

If your partner has had all or most of the credit or loan accounts under their name, there's a chance you may have limited or no credit history. This can become a problem when you apply for credit or a loan, as lenders will need to access your credit report to confirm you have a good repayment history when assessing your application.

TIP: If you have limited or no credit history, it may be time to build your credit profile. Start the process of building your credit history now so you have more options when you're ready to apply for a loan or credit.

2. Navigating a major illness

A major illness can have damaging impacts beyond your physical and mental health. Diagnosis and treatment can come as a major financial expense, in terms of both bills to pay and time away from work to recover or help a loved one recover. Adding to financial pressure is the unexpected nature of the illness, which can raise the risk of late or missed payments on your credit cards and/or loans.

When it comes to managing your finances during a major illness, there are a few options you can consider:

• Create a budget: Get an estimate for what upcoming treatments you might need and their cost, including associated costs such as travel and accommodation. Review your current financial position, where you can cut costs, and allocate room in your budget to cover these expenses. Decide on how you'll track expenses and cover any unexpected costs.
• Review your health insurance: Do your research and review your payment plans, inclusions, exclusions, excess amounts, and waiting periods. If you can, switch to a health insurance plan that better suits your needs. If you can't change providers yet, understand what you can claim so you can get the most financial benefit from your current plan.
• Explore government benefits: Depending on your situation, you may be eligible for government assistance to cover treatment, travel expenses, and income support. It's worth speaking to your treatment provider for advice on where to start your research, as there are several different providers that may be able to help.

TIP: If you've taken the above steps and still need help managing expenses, you can look into options to restructure your financial commitments. Your existing lender may be able to help or you could refinance with a new provider.

3. Moving back from living overseas

While living and working overseas is almost always a positive experience, you could find yourself struggling with credit when you return home. A lack of recent activity on your credit report can make it hard for you to access credit. This is because most lenders will need to review your credit history when assessing your application. And if you've been away for an extended period, you may no longer have any credit history for lenders to review.

If you find yourself in this situation, you can start to turn things around by building your credit. For example, setting up utility bills in your name and paying them off on time can help to start building your credit history.

TIP: Learn what steps you can take to start building your credit history and see how Nichola managed her move back for tips and inspiration.

4. Getting married

Getting married on its own won't impact your credit score - but it's what comes afterward that might. While you and your partner will still have your own credit scores, your individual credit score can be affected if you take out any joint credit or loan products. Here's how:

Applying for a joint credit card or a loan

If your partner has a low credit score, there's a chance your joint application can be declined. This will be recorded on your credit report and may impact your credit score. Another outcome might be that the application is still approved. If you continue to make payments on time, this may potentially help improve your partner's credit score over time.

TIP: Check both of your credit scores before you apply. If you aren't sure whether your credit scores are strong enough, you can ask your lender for advice before applying.

Managing a joint credit or a loan

Once your joint account is open, you and your partner are both legally responsible to make repayments on time. If your partner makes a late payment, misses a payment, or overdraws the account, the action will be recorded on your credit report and may impact your credit score.

TIP: Get on the same page as your partner. Work out how you'll meet repayments, set limits, and agree on who will physically make the repayments.

5. Starting a business

Accessing credit for new business owners isn't easy as most lenders need to see a track record of the business making a profit. As a result, many new business owners use their personal finances to get started, such as savings, credit cards and/or personal loans. This can be a high-risk move, particularly if your business hasn't yet started making a profit or if you see major fluctuations from month to month. Any late or missed payments will get recorded on your individual credit report and may affect your credit score.

TIP: Protect your credit score by limiting the amount you borrow and anticipating fluctuations in income. Get prepared by making a plan to meet the repayments on time, even if it means using income from another source.

6. Becoming a victim of identity theft

Almost 1 in 5 Australians have reported being a victim of identity crime, and it's costing them time, money, and their financial health. This is because stolen personal information can be used to apply for and open credit or loan accounts in your name. This is then recorded on your credit report and may affect your credit score. The effects of identity theft can be long-lasting, with 28% of victims reporting to be refused for credit that would have otherwise been approved.

Tip: Reduce your risk of identity theft by being aware of how it occurs and what steps you can take to protect your personal information.

Don't let major life changes hold you back

Want to stay on top of your credit profile as you go through your next big life change? Our credit monitoring plans give you access to your credit report every month so you can monitor your credit score and track any changes over time. Learn more about our credit monitoring plans today.