Marriage often joins two very different people together: introverts and extroverts, frugal and spend-thrift, good credit and bad credit. Consequently, happy marriages are typically the result of blending the best of the two into a stronger one. Improving your combined personal finances is no exception.
Credit reports are a big piece of that new combined financial picture. They will impact major financial decisions all newlyweds have to make: renting or buying a home, purchasing a new car, maybe even getting a new job.
All of these early financial changes can really get dicey if one spouse has a low credit score.
Obviously, you need to improve that low credit score. Now here comes the uncomfortable part… How do you improve your spouse’s low credit while maintaining marital bliss?
Like all good relationship advice, most of my advice centers on good communication. I suggest starting the credit conversation early, working together to improve both your credit scores, and letting a little of your good credit rub-off on your partner.
Review Credit Reports Together
If you aren’t already a credit guru, you might enjoy the extra services you get from something like Quizzle.com, which includes credit scores, monthly credit report updates, credit change alerts, and expert guidance on improving your credit.
Once you have your credit reports, carefully review them together. Look at the strengths and weaknesses of both. Carefully examine both reports (even a good one) for any errors that may be incorrectly lowering your credit score.
Make a detailed list of items that need to be improved and begin your plan to improve them.
Work Together to Clean-up Credit Blemishes
Reporting inaccuracies, past collection accounts, past due balances, and other credit blemishes should all become joint projects to correct and remove.
You and your spouse should create a joint plan to educate yourself on credit, gather financial documents, contact creditors, take necessary action, and review monthly credit report updates. This plan becomes the heart of your credit improvement. It’s certain to strengthen your financial and personal relationship; fostering empathy, support and trust.
Straightening out past credit missteps can be embarrassing, humbling, frustrating and time consuming. Make sure you remain patient and diligent in your efforts; they will pay-off.
Create a Budget and Spending Plan Together
The biggest factor determining your credit score is how you pay your bills. Consequently, most credit troubles can be tracked back to bad spending and saving habits.
[Free Resource: Check your free credit report and score]People with poor credit scores often go at life without a plan. That’s not all bad, but when it comes to personal finances, it can leave you short at the end of the month. One bill gets skipped, leading to another, and another – pretty soon we’re in a credit pickle.
The good news is that getting back on track may be as simple as spending and budgeting to a more reasonable (balanced) monthly plan. Of course, planning is one thing, having the discipline to stick to the plan is the real key to results.
Chances are your spouse with the low credit score can’t list financial discipline as a big strength. That’s where you can help. Be the gentle, empathic reminder to help them stay on plan.
Give Your Spouse Practice with Household Bills
You’ve probably heard about the importance of a regular date night to marriage bliss. However, I’m suggesting that a regular finance night might be even more important.
A regular time to review the household budget, pay bills, and set aside money for future (planned) spending is a must. Setting aside a time to talk about money ensures both of you are on the same page.
It’s also the best way to build better credit habits – jointly practicing the basics of budgeting and paying bills on time. Talking about good money habits is one thing, practicing them together is the real path to credit improvement.
Setting-up a regular time to pay the utilities, cable, and other routine bills will make money conversations more routine. It gives you the opportunity to show the importance of paying every bill on-time without being a nag, or only giving credit advice when your spouse makes a bad credit decision or has a spending weakness.
You’ll build good credit habits one paid bill at a time.
Add Your Spouse to a Credit Card
I recommend this as a last step, once you feel like your spouse is on solid ground. Once he or she is showing a steady track-record of being more responsible with credit. You might be able to accelerate the healing of a bruised credit score by “rubbing off” some of your good credit onto his or her credit report.
This “rubbing off” process involves adding your spouse to an existing good credit account, like a credit card that you have had for several years, has a low credit utilization (balance to credit limit ratio), and has always been paid on time.
Simply opening new joint credit accounts is typically not as effective and may even lower your credit score a bit, especially if it’s unneeded credit.
Keep in mind, to maintain marriage peace, make sure your combined budgeting and household bill paying is showing good credit behavior before you take this big step.
Improving your spouse’s credit score is critical to managing a financially successful household. More importantly, it might be the key to keeping your marriage happy and healthy. After all, finances are cited as the number one cause of marriage break-ups. Doing this in a peaceful way and keeping your spouse off the defense requires finesse.
Have you already tried improving your spouse or significant other’s credit score already? How did it go? What did you learn?