Home > Credit Repair > Getting Married: Check Your Partner's Credit History First
Getting Married: Check Your Partner's Credit History First |
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It is said that love is blind and how true it is. Those in love get married without finding out much about each other. They commit to living their entire lives together without finding out whether they are compatible. Learning about each other's credit report score is a very distant possibility.
As such it is quite likely that someone with a good credit history marries a bad credit risk, thereby leading to denial of a loan when they try to buy a house together. Unfortunately, financial matters like credit report scores are not probably discussed before marriage. What a pity! Talking about each other's finances and credit report scores can be quite unromantic but experience has shown that it is necessary to prevent one partner's financial troubles spilling over onto the other. It is reported that 80% of the divorces taking place nowadays are caused by financial problems. It is, therefore, essential for two people in love to talk about finances before they say "I do." It is only by discussing each other's finances can they find out that credit report scores are incompatible and then only they can start taking the requisite steps to improve one partner's low credit score while maintaining the other's good credit. It has also been suggested by financial planners and divorce lawyers that couples should exchange credit reports and credit report scores before marriage. A credit report score is a calibrated index of a consumer's ability to make regular payments against the loans that might be given to him and the likelihood of his defaulting on bills. It is typically a three-digit number and the best ones are in the 800s. The lender's decision to extend a loan is usually based on this number. Each one of us should look at credit reports annually and keep a track of the credit report score to prevent any inaccuracies creeping in the report and damaging the credit rating. It might sound very unromantic to study your would-be spouse's credit history but it is certainly better than the prospect of having a divorce two years later. Looking at each other's financial histories and credit report scores is a very practical way of going about marriage. If there are serious financial differences, professional help should be sought, as there are diverse state laws on the financial obligations of married partners and on the division of property and debts in divorce. However, some general guidelines for dealing with mismatched credit histories are being given below: Maintain separate accounts: Keep separate bank and charge accounts in the beginning and try to improve the spouse's weak credit rating. This will safeguard the accounts of the partner who has a good credit from the creditors who might be threatening collection from the partner who has a weak credit and has not been fulfilling the debt commitments. This will also prevent one spouse's weak credit record from damaging the other's credit report score. It is worth noting that if someone with a score of 800 marries a 500, they don't share a score of 650, as a married couple doesn't have a single, mixed credit report score. Each has an independent score based on accounts in his or her name. Improving credit records: Partners should work together to prevent late payment of bills of each of them. This will improve their credit report scores. Joint charge accounts can also be opened with a low credit limit to pay off balances each month. This will improve the weaker credit record and the credit report score in a couple of years. Buying a home: This is the stage when most credit problems appear. Lenders often try to find out if one partner can qualify alone for a mortgage based on a good credit record, as the other partner's credit may not be good. It is, however, better for spouses to take out a mortgage loan together, even if they have to pay a higher rate because of one partner's weak credit report score. The couple can refinance the loan once they are able to improve their credit report score by making on-time mortgage payments. |
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