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18 November 2009

Life Partner Choices Can Affect Your Credit

One of the biggest reasons for a marriage to break up is MONEY! Make sure you talk about your views, spending habits, values, and current financial situation. Know what you are signing up for as your partners credit history can affect you.

Also while we are in love our significant other's habits seem cute - but change to a major irritation once you are committed to each other. You are trying to save for a house and they are out buying shoes or buying sporting equipment.

When I think through conversations with my friends and family - their biggest grip is how their significant other views and spends money. To the point of keeping things from them to avoid fights. Do you really want to go there?

Make sure you have conversations and agree on your goals prior to making a commitment.

Marriage doesn't wipe out credit history
BY don taylor, ph.d., cfa, cfp,
© Copyright 2009 Bankrate, Inc. All rights reserved.
Bankrate — 11/10/09

Dear Dr. Don,
I am worried that when my fiance and I get married anything negative on either credit report will affect us. Will it affect us if it is not a joint account together and it happened before we got married? Please help me ease my mind so I can get back to planning my wedding.
— Melissa Matrimony

Dear Melissa,
You both bring your credit histories with you into the marriage. When you jointly apply for credit, the lender will review both credit reports. In a community property state, the lender may consider both credit reports in all cases. That's because in such states, debt taken on during the marriage is a joint obligation even if only one spouse applied for credit.

The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin. Alaska allows couples to elect community property treatment. Contact your state's attorney general if you live in a community property state and want more information about community property statutes in general or as it relates to consumer lending. The National Association of Attorneys General Web site provides the contact information for your state.

I think it's better to be proactive and review your credit reports and credit scores to see if one or both of you need to work on improving your credit history. The feature "How to get your free credit report" explains how to get your credit report for free, but you have to pay to get your credit scores.

Correcting mistakes on a credit report through the dispute process can clean up a credit report. Because the information in your credit report determines your credit score, the score will improve. The feature "Fixing mistakes on your credit report" explains the dispute process. Even if everything on the report is accurate, most negative information will drop off a credit report after seven years.

Figure out if there's a problem. If there is, figure out how you're going to handle it as a couple. Then, you can go back to planning your big day.

© Copyright 2009 Bankrate, Inc. All rights reserved.

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