CREDIT CARD HELP: The basic fundamentals of credit cards

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Getting married? Don't say 'I do' to bad credit

Communication about finances before the wedding is key

By Adrienne Gibbs

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With financial squabbles topping the list of reasons why couples seek divorce, experts say it makes sense to check out your partner's creditworthiness before you get married.

New couples heading to the altar happily "deal with social and sexual issues and yet the financial issues are the ones more likely to cause a divorce than anything else," says Mike Sullivan, director of education for Take Charge America, a Phoenix-based, nonprofit financial education and consumer debt service organization. Before you say, "I do," you should get to know each other's financial health, and nothing says it better than your credit report. (See "12 debt questions to ask your betrothed.") "The credit report reflects how a person manages money. If their credit report is a lot different from yours, it probably means you have a lot of financial compatibility issues."

Sullivan is not alone in that belief. A Utah State University study found that a majority of marriages, about 66 percent, have "major debt" problems, and 35 percent of those who participated in the study kicked off their nuptials already with more than $5,000 in debt. Although there is no hard evidence proving disparate money attitudes is the No. 1 reason for divorce, many divorce lawyers (along with the Utah researchers) say money is usually one of the top three reasons for the split (with infidelity and dishonesty also cited).

Opening Pandora's box
So, how does a couple get off to a good financial start? First and foremost, a couple must communicate about finances before, after and during the wedding process, says Sullivan.

Among the things you need to find out are your intended's credit score, credit history,  spending habits, debts and assets, say experts. It also helps to know and discuss your beloved's guilty spending pleasures, such as a new $500 Coach purse every season or a new $80 Xbox game every week. Can your new spouse forgo these expenses in a pinch or are these items not negotiable?

Additionally, financial planners say a newlywed couple should plot out their collective financial goals --whether it's buying house, having kids, taking annual European vacations or saving for matching Harley Davidson motorcycles in retirement. Doing so can help pave the way toward smoothing out any credit-related kinks that might bankrupt these dreams, says Mechel Glass, director of education and a credit counselor with Consumer Credit Counseling Services of Greater Atlanta.

If your partner gets a bit squirmy, Glass suggests being the first one to break the ice.

A tale of credit regret

Looking back, Melanie Davis wishes she and her husband had paid off his credit card debt and worked on his credit score prior to getting married. But five years ago, it didn't seem like a huge deal.

At the time, she scored in the low 800s. His credit score? Very low, she says. 

"I knew he had bad credit going into it and looking back now I really wish we had resolved that before we got married," says Davis, 35, of Birmingham, Ala. "We didn't attempt to try to do anything to fix it ... His credit card debt was over $10,000. I knew that it was not even worth us even attempting to put him on the credit application" for their new home, she says.

Although the newlyweds got their house, Davis had to apply for the loan by herself and added her husband to the deed only after the closing. They had talked extensively about their finances during their engagement, but didn't really make moves to fix anything until after the nuptials. Now, Davis, who is a manager with the Birmingham Regional Chamber of Commerce, recommends that all couples have a serious credit conversation and pay off all major debts before marrying.

In Davis's situation, assuming her partner's credit also sped up the process. For example, Davis had applied for a low-interest credit card from her credit union and then transferred her husband's debt over to that card. Happy with the much lower interest rate, they worked together to pay off that debt in just six months. That method worked better than just hoping that he'd pay off the debt by himself, she says.

The Davis' solution was feasible because the couple communicated openly and tackled the problem together, two moves Sullivan believes more couples should make.

"They can just say, "I'm showing you the things on my report, so let's look at yours and talk about how we can work together as a family to get the things we dream about for our family in the future,'" says Glass, who teaches an online financial education primer for newlyweds. Called "Saying I Do," the CCCS class teaches couples the key financial questions they should ask each other before marriage.

The most important questions: "What's your credit score and do you know your credit score?" says Glass. "Just have those discussions and once both people know what's on there, you can work to improve it."

If the scores are widely different, then the couple has work to do, she adds. First, the "good credit" spouse should apply for a mortgage and other forms of credit. Then, the "good credit" spouse can teach the "bad credit" spouse why it's important to pay off bills, not carry a balance and to be timely with payments, she says.

"If one person has a horrible credit score and the other has pristine credit, you probably want to keep those separate and work with the other person to correct the things they're challenged with," adds Glass. The best scenario, however, is to take the time to build up each other's credit before you tie your financial future together, experts advise.

Who gets to be in charge?
So, how do you improve one person's credit while keeping yours clean? Couples could consider opening up a joint account so that the spouse with the lowest credit score might benefit from being joined with the one who has a high credit score. Care must be taken if such accounts are created, Sullivan says.

"You can help somebody improve their credit if you want to by lending them some of your creditworthiness," says Sullivan. "Or you can pay their bills for them. If you're going to protect your own credit, you've got to decide who's most responsible. Whoever has the highest credit score pays the bills and controls the money."

Couples should remember that nearly everything they need to build a financial life together is tied to a credit score and credit history, including necessities such as insurance, turning on a new electricity service, ordering cable and financing a home. While marriage alone doesn't mingle two credit scores, they do get mingled once a joint account is opened, a credit application is co-signed or a person is added as a joint account holder or authorized user to an existing line of credit.

Once your credit is tied to another, separating the two becomes nearly impossible and it is extremely important that both partners work together to keep their credit scores high. If the phone bill is in the woman's name and the man is responsible for paying it, but he pays late, there could be problems, says Jerome Tellis, a Florida-based financial adviser with MetLife.

MetLife doesn't use credit scores to help underwrite insurance policies, but the company does look at credit histories, says Tellis. That includes all those boring bills.

Tips to spruce up your partner's credit score
  • Assume your partner's debt by opening up a joint credit card account or simply transferring their debt over to one of your lower-interest rate credit cards.
  • Educate yourselves about the importance of credit histories and credit scores and how it will impact your life together.
  • Set up a budget. Pay bills on time. Create financial goals for 5, 10 and 20 years out.
  • Set a time frame with your partner to pay off debts in a timely fashion, and then check your credit scores annually to chart your progression.
  • If your partner doesn't mind, take over all the bill-paying responsibilities for yourself - just don't forget to talk about money matters. 

"There is a direct correlation between a person's credit history as well as their claims history," says Tellis. "If their credit history is not more favorable, they tend to file more insurance claims. Credit history is only one of the many factors that go into the underwriting process for insurance."

Tellis suggests that couples ask their agent to use the more favorable credit history when applying for coverage. He also says couples should check each other's credit history for bankruptcy, unpaid student loans and foreclosures -- as they all can impact favorable treatment.

Soon-to-be-wed couples should consider all these issues up front, so the marriage will have a much better chance for success. Just ask Davis (see box), who occasionally thinks about the money that she spent to repay debts that weren't technically hers.

Looking back, she suggests that couples consider postponing marriage until debt and credit issues are resolved. That way, she says, the honeymoon is sweeter.

"Finances to me are the biggest root of a problem for marriage," says Davis. "If you don't have your finances in order before you get into the wedding, you'll be fighting about it. I promise you will."

See related: 12 debt questions to ask your betrothed; Authorized user or joint account holder?; "Piggybacking" your way out of credit

CREDIT CARD HELP: The basic fundamentals of credit cards

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Updated: 10-26-2016

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