5 Little-Known Ways Your Partner Can Ruin Your Credit

Planning to move in with your significant other聽or tie the knot in the near future? There are many exciting discussions to be had, but money matters may not be one of them. In fact, it鈥檚 the dreaded topic many couples prefer to stay away from. But doing so can have serious implications for your finances and your credit.
Let鈥檚 take a closer look at how your significant other can聽send your credit to the trenches:

Careless Money Management
In some households, there is an appointed financial manager and the other relies on him or her to handle business. Unfortunately, they may not exercise sound financial management habits, leaving you to pick up the pieces and repair your credit after the damage is done.
Minimal Credit History
Kudos to your partner for avoiding debt, but it can become an issue when you鈥檙e ready to open a joint account, activate utilities or make a major purchase. Reasoning: minimal credit history equates to elevated risk in the eyes of lenders and increases interest rates and deposits or even worse, disqualification.
Excessive Spending
No cash on hand? No problem. Paying with a credit card will do the trick.
If this your partner鈥檚 mentality, beware of the damage that can be done to your credit score if it鈥檚 a joint credit card and the spending gets out of control. Not only will your credit utilization ratio take a hit, but you could fall behind on payments if the minimum聽payment becomes too much to handle. (Another thought: only paying the minimum will quickly land you in a mountain of debt).

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Impulse Purchases
This goes hand in hand with the last point. Whipping out the plastic each time you see a 鈥渕ust have鈥 item is a recipe for disaster, especially if it鈥檚 a joint account and your partner is unaware of your actions.
Untimely Purchases
Late payment fees aren鈥檛 the only thing you have to worry about when you miss due dates. Your credit score could also take a hit if the delinquency spans beyond 30 days and the creditor or service provider reports the delinquency to the credit bureaus. So if you share any accounts and the party responsible for remitting payment drops the ball, down goes your credit score.
A Suggestion
Before taking the next step in your relationship, share money perspectives and credit reports with one another. Schedule an hour or so of your day for a meeting and cover the following:

Who will pay the bills
Debt-management practices
Joint checking and savings accounts, and if they will help thwart irresponsible spending habits
How to improve your credit score. (Visit AnnualCreditReport.com to retrieve a free copy of your credit report. Also, take a look at this article to learn more about the types of credit scoring models).

If there are major discrepancies and credit issues, devise a realistic plan of action to get over the hump. This may be painful, but will mitigate聽the problem聽before it gets out of hand and costs you your relationship.聽

This post was published by Allison Martin, for 禄聽ReadyForZero.
ReadyForZero is a company that helps people get out of debt on their own with a simple and free online tool that can automate and track your debt paydown.


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