5 Ways Your Partner Can Ruin Your Credit

AAA

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.
  1. No results found.
Related Articles
  1. Personal Finance

    5 Ways Your Partner Can Ruin Your Credit

    Financial disagreement is one of the top reasons couples split, and often after one person has ruined the other's finances.
  2. Personal Finance

    The Road To The Worst Credit Score Ever

    We look at what you'd have to do to achieve the worst credit score possible. Use this as a guide for what not to do.
  3. Managing Wealth

    Key Questions to Ask Before Moving in Together

    Moving in together is a big step. Here are some key financial questions to ask your partner before you make the move.
  4. Personal Finance

    Financial Infidelity: Are YOU A Cheater?

    These sneaky financial moves could erode your finances - and your relationship.
  5. Personal Finance

    Taking Your Personal Financial Inventory

    Taking a step back and assessing your personal finances each year can show how well you're doing with saving and what's needed to manage credit and debt.
  6. Personal Finance

    6 Benefits Of Increasing Your Credit Limit

    If you can resist the urge to overspend, then raising your credit limit could benefit you in various ways.
  7. Personal Finance

    Combining Credit For A Happy Financial-Ever-After

    A couple's finances may not always be a match made in heaven. Find out when to say "I Do".
  8. Managing Wealth

    Tips for Talking About Money at Every Step of a Relationship

    How much you talk about money differs, depending on the stage of the relationship.
  9. Personal Finance

    Should You Open A Joint Bank Account?

    Joint finances may not be romantic, but it's an issue that serious long-term couples will have to confront at some point.
  10. Retirement

    6 Methods to Maintain a Healthy Credit Score During Retirement

    Learn how to improve your credit score during retirement. Your credit score still matters in retirement, and these tips can give it a boost.
Hot Definitions
  1. Buyback

    The repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies ...
  2. Tax Refund

    A tax refund is a refund on taxes paid to an individual or household when the actual tax liability is less than the amount ...
  3. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced within a country's borders in a specific time period, ...
  4. Inflation

    The rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of ...
  5. Merchandising

    Merchandising is any act of promoting goods or services for retail sale, including marketing strategies, display design and ...
  6. Small Cap

    Refers to stocks with a relatively small market capitalization. The definition of small cap can vary among brokerages, but ...
Trading Center