9 Year Mortgage discusses how to balance financial obligations in marriage
Despite most relationships having a primary breadwinner it is still wise to develop both partner’s credit history and financial security. In many situations women make less in the work place than men and become stay at home moms when the couple begins having children. This tendency doesn’t mean a wife’s credit history is less significant. Women often find themselves in situations where they need available credit as an individual.
9 Year Mortgage recommends that couples avoid only focusing on the main provider’s credit score and instead arrange for both spouses to have a good credit situation that would enable them to be self-sufficient if needed. The following are things to keep in mind as you try to balance credit obligations with your spouse:
Remember you have two separate credit histories
Keep in mind that when you get married you still maintain your individual credit identities. Whatever your marital status is, your credit score will only reflect the financial records under your name or any duel accounts that you might share with your spouse. When planning to make purchase on credit with your spouse, the application processes will often include a check of both separate credit scores and the lower of the two will have a greater effect.
Maintain some separate credit
You can potentially build up positive credit while just having joint accounts, but a change in marital status could result in creditors wanting to restructure your accounts based on your individual credit report. In the event of a passing of a spouse or a divorce you don’t want to add the hardship of rebuilding your credit as an individual so maintain separate credit cards in each of your names and you’ll be better able to shape the credit rating of both spouses.
Avoid large balances
It’s a positive reflection of your credit history if you qualify for high credit limits, but this doesn’t mean you want use all the credit available to you. Don’t burden yourself or your marriage with large amounts of credit card debt because that will lower your rating. Paying off debts each month and only using a fraction of your limit is the best way to show a good credit history.
It is also wise to check your credit ratings with your spouse once a year; you can receive a complimentary copy of your credit report annually by going to annualcreditreport.com.
Manage the money together
It is important for both spouses to have an understanding of where their money goes and what financial responsibilities they have. It may be uncomfortable to share the monetary burden with your spouse, however, working as a team will alleviate some of the stress and ensure that if something happens to one of you, the other will be on familiar with how to meet financial obligations by them self.
Be cautious when co-signing
Co-signing on your spouse’s loans could have a negative influence on your credit score and could leave you accountable to pay the debt in full if your partner is unable to make the payments. As a co-singer you share all account obligations and therefore, the actions of the other person will be reflected in your credit history as well. In addition, be weary of co-sign on your spouse’s student loan. A loan won’t be forgiven if your spouse passes away when there is a co-signer and otherwise it would be absolved at their death and you could be left to pay said student loans in full. Only co-sign for another person if you can pay for the debt if they were to stop making payments. Some loans are best kept under one of your names instead of sharing that burden on your credit.
Deal with debts before divorce
Even after a divorce is finalized debt obligations are often shared between the two parties if they have combine credit balances. If an ex-husband or ex-wife defaults on a loan you often are obligated to pay regardless of who should be responsible for that asset. Problems like these can severely tarnish your credit if you are listed on the loan. 9 Year Mortgage recommends you settle all accounts or divide up existing debts before a separation if you’re unable to do this ensure that you have a legal right to view all accounts that reflect on your credit.
9 Year Mortgage supports couples taking charge of their credit situations together and being financially prepared for whatever will occur in the future.
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