Marriage and Fixing Credit scores

 Everyone has there own history and have made mistakes.  You really find this out once you decide to combine your life with someone.  This is great, but this is also when the problems arise.  The question comes up what do you do when one of the two of you has "bad" credit.  No matter if you are going to combine your finances or keep them separate. It is important for the both of your long term health and piece of mind that you are on the same page.  

This usually isn't the first thing people talk about in a relationship and often is something that is found out after they are already married.  The important thing to understand if you are the person with bad credit is that you are not a bad person and these are now the facts. Work with you partner to find out how you go into this situations.   This goes the same if your partner is the one with less optimal credit. 

First figure out the cause and develop a plan to get out.  Some are easier then others to fix and you might already be on the right track to fix them. 

Now where you are in life has a big factor on why you credit is low. Notice I said low not bad. We must think positive :{). Here are the top reasons for someone to have lower credit.

1. Failing to pay bills on time
2. Collectors/charge-off
   
3. Bankruptcy 
4. Default on loan
5. Large balances
6. No credit
   

You may ask yourself what effect does my bad credit have when we go to buy a house or when we apply for a car loan.  In reality is does a lot.  There is some pride and security to have both your names on a deed for a home or to buy a new car together.  The thing is. There are some legal reasons you may do this, but it is probably not the most financially sounds thing to do. The bad things that can happen are you could be denied the load or you interest rate could be many points higher.

OK lets look at this from if you have good credit.  You will worry that there bad credit will effect you.  The answer is. No it will not effect your score, but there bad habits could effect your habits.  I don't see a reason for people to share credit cards, unless one of them is a responsible buyer. Or if you are keeping your finances separate and both in-charge of there own payments.  This goes the same if you co-sign anything. You are now the responsible party even if it there "their" car and they are making the payments.  

This goes back to why one of you had bad credit. If the reasons are because of large balances and failing to pay bill on time.  There are sometimes valid reasons for this and they are working to correct this. i.e Medical bills, school, family, or loss of job.  There could be some very good reasons and what sank the credit score is not a long term issue.  Now on the other hand if the issues are mismanagement or a life style. Those issues need to be corrected otherwise marriage issues will follow. 

The last issue is almost no credit. This is not uncommon for people that grew up using mostly cash or lived with there parents for awhile. 

This is not going to be a quick process and really it doesn't need to be.  

Use Case

• One person has Above Average or better credit the other has below Average.  
•  Work on paying off any credit card debt first. Go with highest rate first.  Once all paid off work on raising the below average through on time paying, keep cards open a long time, and in time applying for more credit or asking current card to increase available balance. 
• The Above average person can open up new credit and may consider opening major purchases in there name to get the best rates. Adding the lower credit person onto the load will help them build credit also so it is something to check on the cost.
  
• One person had Average or credit the other has below Average.  
•  Work on raising both score by paying off any credit card debt first. Go with highest rate first.  Once all paid off work on raising the below average through on time paying, keep cards open a long time, and in time applying for more credit or asking current card to increase available balance.
  

•  Both has below Average 
•  Work on raising both score by paying off any credit card debt first. Go with highest rate first.  Once all paid off work on raising the below average through on time paying, keep cards open a long time, and in time applying for more credit or asking current card to increase available balance.
  
• One has Excellent the other has Average
• This can be very difficult, because the excellent scorer may feel protectant of their credit and not want to jeopardize it. This is normal. Like all the cases you need to figure out the root cause.  If you spouse just doesn't have much history with credit. Signing them up for there own card or a authorized user is an option. If you are both responsible with credit that is a great way to build your history. Otherwise, if the below average user is working on behaviors. Then signing them up as an authorized user and shredding the card is another option. 

It's import to be open an honest with each other. Work on it as a team. If you are like many families and want to keep everything separate then just be honest when sign a load to your signification other why only one of you is on the car/house.  You can't force your spouse to be financially responsible, but you can be there to help them when they ask for help.