Listed Applicants

• Lenders only consider the income and credit report of the individual or individuals listed on the mortgage application. If a husband and wife both put their names on the application, then both of their incomes and credit histories affect the terms of the home loan. If, however, the working spouse applies without the nonworking spouse, then only the working spouse's income and credit affects the mortgage.
  
  

Spouse With Bad Credit

• If a nonworking spouse has bad credit, the solution is simple. The working spouse, who has all of the income anyway, should apply for the mortgage alone. The nonworking spouse's bad credit would disqualify them or force them to pay a higher interest rate. Even though the mortgage will be in the working spouse's name, and all of the mortgage payments will only appear on that person's credit report, the nonworking spouse can still be named on the deed for the home.
  
  

Spouse With Good Credit

• When the nonworking spouse has a good credit score, it's probably best to include this person on the mortgage application, especially if the working spouse has bad credit: The nonworking spouse's good credit might be the only way they can qualify for a home loan together. Unfortunately, the nonworking spouse can't apply alone, because the working spouse's income is needed to support the mortgage.
  
  

Considerations

• Having a mortgage and making payments on time may improve a person's credit score. Therefore, if the working spouse --- who needs to be on the application to prove income --- has a bad credit score, the score might go up as the couple pays down the mortgage. A few years down the line, they may refinance to get a lower interest rate. On the other hand, if a couple decides to leave off the nonworking spouse due to bad credit, this person doesn't have the benefit of building up her credit score with timely mortgage payments. The couple may obtain a joint credit card and work on paying down the nonworking spouse's debts as ways to raise that person's credit score instead.