Save Yourself Before Marriage

Merging Marriage and Credit

The wedding season is upon us and thousands of newlyweds will be tying the knot this summer. Starting a new family brings new responsibility. In this economy with such an emphasis on credit, whether buying your first home or buying another car, it is important to understand the dos and don’ts of your credit before you say “I do.”

There are many common myths about what happens to each spouses’ credit when you get married. Fortunately, many are not true.

• My spouse’s poor credit will affect my score – This is a very common concern among new couples. Many couples have at least one or both spouses with bad credit. However when you get married, your spouse’s poor credit does not affect your score or profile. Only when you open up joint accounts is when the negative reporting may impact your application, especially if you are buying a home together. A spouse’s negative credit history may lead to a denial or higher interest rate.
• When I change my last name, my credit history is erased – There is a common myth that a wife will get a new profile under their married name, and all information under the maiden name will be lost or removed. When you change your last name after your married, and I’m only talking to the ladies, the change will be updated on your credit profile as an alias. All other information previously reported will remain the same.
• I must become a joint user on my spouse’s account – You do not become a joint user automatically when you get married. The accounts that you have before, such as credit card accounts and car loans, will still be on that respective spouse’s credit history. You must add the spouse as an authorized user on the credit card accounts so they can have access as well. After that, the accounts will be reported on the other spouse’s credit report in the future. To add a spouse onto a loan like a mortgage or car loan will require refinancing.

Now that you know the facts and myths about uniting your credit, here are some tips to boost both of your scores.

• Order updated credit reports – Get a credit report from annualcreditreport.com or freecreditreport.com for each spouse. Evaluate any negative trade lines that need to be paid off or disputed. Improving each spouse’s credit score can save thousands in the long run. A high credit score can get you a low interest rate on a mortgage for a home, a car loan, and credit cards. You can also get a lower insurance quote for car and homeowner’s insurance with a high credit score of 700 or better.
• Learn how to budget – Now that you have two salaries as opposed to one, you will also have more debt. A bigger house, another car, and even furniture will increase your bills monthly. Let’s not forget the expenses from your beautiful wedding!! Create an income and expense sheet in which you write down how much money is coming in each week, and how much is going out. Writing down and evaluating your expenses will help you to cut down on unnecessary things and help you to put aside some saving for things in the future like kids!!

Talking about credit, finances, and budgeting is not the most exciting things for newlyweds, but they are the most common causes of marriage breakups. Get your finances in order from day one will keep you happy and prosperous for the long run.

By Carl Agard

Internet Radio Host Carl Agard is an author of four books on wealth building and finances. His latest book Getting the Real out of Improving your Credit is available now. www.carlagard.com