Avoid Divorce – Deal With Credit Issues Before the Wedding

Credit Cards & Divorce

According to various studies, money is still the #1 cause of divorce in the United States. Other causes include stress, lack of communication and dishonesty.

With that in mind, starry-eyed couples who are planning to marry should begin practicing good communication and honesty well ahead of the ceremony – and lay their financial cards on the table.

The first step is to get your free online credit reports and see exactly where you each stand. Knowing this can reduce stress, increase trust, and lead to good decision-making.

Next, come to an agreement about how money will be handled in your household. If there is a problem, decide how you will solve it. Money management is a tough issue, and definitely not romantic. But dealing with it ahead of the marriage is far safer both financially and emotionally.

To clear a point of confusion: Each partner in a marriage has his or her own credit file and credit report. Thus, your spouse’s past credit problems don’t have to damage yours.

If you kept everything separate throughout your marriage, you might not have a problem, but few people can do that. At some point you’ll want a joint checking account or a joint credit card. You may buy a car together, and you may both want to be on the deed to your new home.

When you mingle your money or obligations is when a spouse’s poor credit history can affect both of you.

Balances due on old judgments can suddenly make money disappear from your joint checking account. The interest rate on your credit card or car loan will be higher, and you’ll have a tough time getting that mortgage loan. You may even have trouble signing up for Cable TV or renting an apartment if the credit problems are severe.

If one of you has bad credit and you’re planning to buy a new home, let the partner with good credit get it done before the wedding. As a single person with only one income, you may not qualify for “as much house” as you would with two incomes, but that could be a blessing in disguise.

If you can afford the home with income from just one partner, you’ll avoid feeling like a slave to the house later, and will enjoy it more because it won’t be a financial burden.

If you plan to rent, do that ahead of time as well. And get signed up for cable before you’re required to show your spouse’s credit report. The same goes for a car purchase. The amount you’ll save on interest will more than compensate for not having both names on the loan.

Meanwhile, keep your checking and credit card accounts separate until the credit problems become history.

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