Money is one of the biggest conflicts in marriage, which is why it is important for couples to discuss all aspects of their financial lives.
Building a good credit history together is the first step toward financial security as a good credit score is necessary for any large purchases that require loans, like purchasing a new car or a home.
If one person in the couple has a poor credit score, interest rates on loans could be higher, even if the other person has an excellent score. These tips can help couples raise their score and be in a better financial position.
Learn how credit works
For many people, credit and debt are illusive creatures that cannot be understood. The fact is, understanding a credit score is not as complicated as many people believe. As a couple, it is important to learn how credit works together to avoid pitfalls in the future.
Payment history is a critical part of a credit score, making up as much as one-third of the entire score. In addition, couples should keep their balances to 10 percent or less of the credit line and try to pay them in full each month.
Remember that lenders do not look at balances on a joint account as half his or half hers. They consider both parties to be fully responsible for the entire balance on the account.
Make a plan
Once a couple has had an honest discussion about each of their credit scores and what they understand about credit, it is important to make a plan for moving forward. It is important to keep from being critical of a partner whose credit may not be terrific and approach the issue as a problem to be solved.
Look at repairing a credit score as a way to get a handle on finances. Set up strategies that will help get debt paid as quickly as possible. If a partner has problems getting bills paid on time, arrange for automatic payments so that payments arrive in a timely manner.
The key is to work on the problem together rather than separately. It may be necessary to work with credit and debt specialists from places like Abakhan & Associates Inc. who can create a plan that is easy to follow and will help eliminate debt quickly.
Keep communication open
Although every couple has their own methods for handling finances, the nuts and bolts of a couple’s financial world is normally handled by one individual. However, it is important to continue the dialog about credit on a regular basis.
Every three or four months, the couple should sit down and review where they stand and what adjustments need to be made to meet short- and long-term goals. Discuss each person’s strengths and weaknesses when it comes to credit as well as how money was handled during their childhood.
All of these factors have bearing on how money is handled as an adult. Discussing them openly can give each partner more insight into how the other feels about credit and debt.
It is important for each partner to have credit in their name only. This not only allows them to control their own spending, but also helps them build their own credit score should something go wrong in the relationship.
It also allows each partner to have a separate identity from their partner, something that is important psychologically in a relationship. However, both partners should be aware of the individual credit each of them have to prevent financial difficulties from developing in the future.
These tips and suggestions can help couples have a smoother, less contentious relationship with money while also helping them improve their credit score.
Information source: Abakhan & Associates Inc.
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