Marriage
works well when both partners involved live up to their responsibilities. That
includes having a healthy credit score. Unless you are properly informed on how
marriage affects credit, you may believe that one partner’s good
credit history can cover for the other person.
Even though being married connotes
living a combined life in many aspects, that doesn’t change your credit history
in any way because each person still maintains their own credit reports and is responsible for their own credit scores.
Due to the benefits you stand to gain from joint loan applications, you and
your spouse can decide to obtain a loan as a couple. If either of you has bad
credit, there can be limitations to how much of a loan you can access. You may also find that
the loans you jointly qualify for come
with high interest rates or your
application gets outright disapproval.
Married couples need to understand
the importance of maintaining good credit history on an individual basis, and
where one of the partners has got a bad credit reputation, they can learn to
improve their credit using some helpful tips.
The following are reasons to maintain
your own good credit history rather than
relying on your partner.
Many couples want to own their house, but the financial logistics of doing so have always been a major challenge. When it comes time to finally apply for a mortgage, a couple can
file on their own, or they can submit a
joint mortgage application. However, most people will likely not meet the
criteria for getting approved on a mortgage loan on a personal and individual level.
A more effective option is to involve your partner in the
application process. In fact, it’s
usually the first option that most married people remember because joint loan
applications can mean more money because both incomes are taken into consideration. However, the truth is your credit
scores will be the major determinant for
approving a joint loan and for getting favorable terms.
If your own credit
score is in the negative while your spouse has an excellent one, or vice versa,
your chance of getting the mortgage loan approval is slim. That’s why you want
to try your best to maintain a good
credit history.
Credit history is also a big part
of the hiring process for many organizations-especially those in the financial sector. The rationale
behind it is to present the company and its staff as being reputable. So,
having a poor credit history can actually
stop you from landing that dream job. Since having your dream job normally means better pay, it's in your best
interest to build a good credit history for yourself instead of relying on your
partner’s credit for everything.
Divorce is particularly difficult to cope with. The rate of divorce for married couples in the United States
is around
45% while 25%
of the total number is money-related. A poor credit history is an
implicit reflection of bad financial habits-such as late payments-and are detrimental to a healthy marriage. Being
complacent with a bad credit score may eventually affect a marital relationship
because, as the records show, your finances are an essential part of
marriage.
The rate of divorce in the US is around 45% while 25% of the total number is money-related
You just found out that the good credit score of your spouse doesn’t impact
your credit report. Knowing the importance of building your own solid credit history is good, but it doesn’t automatically translate to
increased scores for you.
Take the following steps to eliminate a negative credit history and start building a
positive credit score for yourself:
Get a free credit report from the three major credit reporting
agencies-Equifax, Experian and Transunion. You are entitled to one free
credit report from each bureau every year. Once you receive your credit
reports, check for errors and any negative information in the reports that hurt your credit scores and make
sure you push for corrections if you discover any inaccuracies.
The attitude you have when you pay
your bills is the singular most important factor in your credit repair journey.
Going forward, you should make sure to complete all payments on time and pay
down your debts whenever you can. You can talk to your creditors
to set up automatic payments which will be
automatically debited from your bank account.
Also, avoid payday lenders that charge exorbitant fees and high interest rates for short term loans. Even
if you meet their short term repayment conditions, it can be easy to fall even
further into debt because of the additional money you will have to pay for the
loan.
You need to have a good amount of patience as well as discipline to recover from bad credit history. Shortcut attempts like closing an account abruptly so it can go away or opening too many new credit accounts randomly to increase available credit can only make a bad situation even worse. Apply for new credit accounts only when you need them and learn to cancel a credit card the right way.
Applying for too many new credit accounts will place a hard inquiry on
your credit report for each application which can drive your FICO credit score
and credit rating further down. These credit inquiries will also stay on your
credit report for several years.
While
it's advisable to maintain low credit card balances while keeping your credit
utilization ratio under 30 percent, overspending your credit on daily needs can
eventually become a problem if you are unable to pay the balance when it's due.
Tracking
all your credit card purchases and monitoring your credit account will not only
help trim your expenditures but also allows
you to discover any cases of fraudulent activity that may appear on your account.
Normally, credit card companies would provide you with useful information
relating to how to settle your credit card bills and accounts. Keep an eye on
such information and break it down to actionable steps.
Marriage is like a bicycle; it doesn’t matter whether its’s the front or
back tire that deflates -
the bicycle cannot move. Couples should be concerned with the
financial wellbeing of each other. If you are the one with a poor credit score,
you can discuss your spending habits and finances with your spouse to see how
you both can team up to improve your credit reputation.
The
rewards of a joint venture such as this include having an accountable partner to help monitor your progress, and a growing relationship that will
not be flawed by the thought of marrying someone you have to rely on for good credit history.
If your credit has been negatively impacted, and you're not sure what your options are, CreditRepair.com can help.
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