5 Ways Your Partner Can Ruin Your Credit

January 03, 2011  |  Filed Under » , , , ,  |  View as article

5 Ways Your Partner Can Ruin Your Credit

When you're thinking of pickup lines, probably none of them include, "Can I see your credit report?" Talking finance isn't exactly romantic, which is why most of us don't - not even once we decide to move in together or get married. Here are five ways your partner can ruin your credit, and ways you can prevent them.

High Debt

Before combining households, ask about any accounts your partner has - show each other your credit report in the spirit of honesty. High debt-to-income ratios will lower your credit score, so particularly if you're getting married, so make sure you know exactly what each of you is bringing to the table in assets and liabilities. Come up with a realistic plan to pay it down and plan to check on your progress periodically.

Careless Bill Paying Habits

It's just an electric bill, who cares if you're a little late, right? Think again: that late bill, whether it's a utility bill or the all-powerful credit card bill, can knock down your FICO score by a whopping 100 points. Once you combine households, married or not, any accounts in both your names will affect both your credit reports.

Sometimes, it may be better to accept that one of you is better with money than the other - and that's okay. Consider setting up a household account for joint bills and having the more money-savvy of you two pay the bills.

No Credit History

Avoiding debt is honorable, but it's important to build a credit history by paying off accounts on time - and credit cards are a part of that. Your partner's lack of history will reflect on your credit score if you combine accounts, so look for ways you can build his or her credit report and FICO score. Consider adding your partner to your accounts; just expect this process of building credit to take a while.

Overusing Plastic

Just as avoiding credit cards is bad, so is overuse of plastic. Aim to keep your usage below 20% of your limit - so if you have a $5,000 credit line, keep your balance below $1,000. Pay off the balance monthly whenever possible; no one wants to pay interest on that steak dinner you had back in July. If your partner is quick to pull out the plastic, make sure you sit down together to look at the bill each month.

Not Checking Credit Reports

Mistakes happen, and often they'll show up on your credit report. When was the last time your partner checked his or hers? Don't wait until you're ready to apply for a loan to check your report, because it can take a while to correct any errors that show up. You can get a free credit report annually - make sure you know what's on yours and your partner's too.

Happily Ever After

Your partner's financial habits can ruin your credit if you're not careful, affecting loan rates, job applications and your financial future. Once you're ready to combine finances, sit down and plan your financial future together - for the sake of your relationship. That pickup line sounds really unromantic, but asking to see your partner's credit report may be the best thing you can do to make sure you live happily ever after.

Related Articles

  1.

    Restaurant Segments Going Under

    Diners are as American as apple pie, yet their popularity is waning with today's ...
  2.

    Barclays To Cut 3,700 Jobs

    Find out why Barclays is cutting about 3% of its workforce and what this means for the ...
  3.

    Are Headhunters Worth It?

    Some recruiters and recruiting firms use more methods to source suitable candidates ...
  4.

    Is Relying On Home Equity For Retirement A Good Idea?

    Of Americans aged 50 to 70, 47% have reported that they are relying on home equity to ...
  5.

    Should Married Taxpayers File Together?

    The earned income credit is one tax incentive married couples filing a joint tax ...
  6.

    What Does Filing As Head Of Household Mean For Your Taxes?

    In order to file as head of household, you must meet several requirements. Find out ...

More Slideshows

  1.

    7 Tips For Closing A Credit Card

    Closing a credit card can help improve your credit score by freeing up your available ...
  2.

    5 Ways Your Partner Can Ruin Your Credit

    Financial disagreement is one of the top reasons couples split, and often after one ...
  3.

    5 Ways To Buy A Used Car

    Buying a used car usually takes a little extra effort, but it can save most buyers a ...
  4.

    10 Ways To Budget When You're Broke

    When you're short on cash, a strict budget is the best tool for finding financial ...
  5.

    6 Worst Financial Mistakes And Why You Made Them

    Many of our worst financial mistakes spring from the best intentions.
  6.

    Top 5 Budgeting Questions Answered

    Answering your questions on five of the most popular budgeting questions around.
comments powered by Disqus
Recommended
Loading, please wait...
See More »
Trading Center