You can’t help who you fall in love with. Sometimes the love of your life comes with less than stellar credit. Thankfully, you are not responsible for your future spouse's bad credit or debt. However, their credit problems could result in denied loans or lines of credit you apply for together after you are married.
It’s a wise financial move to discuss credit issues before you are married, because debt problems and spending habits can result in stress in a marriage. You should start by ordering both your credit reports from www.annualcreditreport.com. With your history in front of you, you should be able to have an open discussion on past finances, and learn why or how your future spouse got in trouble with their credit.
If the outstanding debt is significant and will affect your financial future as a couple, you may consider going through credit counseling together. CredAbility, formerly Consumer Credit Counseling Service of Greater Atlanta, offers a free counseling session. Attending the counseling session does not affect your credit score or credit report. Their website at www.credability.org also has an online course designed to show you how to identify areas of concern and reduce financial stress before you walk down the aisle. CredAbility’s other services include debt management plans that can provide you a way to pay down outstanding debt. However, note that CredAbility cannot repair your credit or settle debt for pennies on the dollar.
Another consideration is to keep you and your spouse’s credit separate until your spouse's credit record improves. Once you get married, it may be wise for each of you to use separate checking accounts and credit cards to maintain your own active credit record. Perhaps this could allow your spouse the necessary time to repair his or her credit with continuous, on-time payments.
You can apply for credit by yourself rather than applying for joint credit after you're married. However, this solution is not without drawbacks. For example, you may have to postpone applying for a mortgage loan, as you may need your spouse’s income to qualify for a large loan amount.
William G. Lako, Jr., CFP®, is a principal at Henssler Financial, and a co-host on Atlanta's longest running, most respected financial talk radio show "Money Talks," airing Sundays at 10 a.m. on Talk 920 AM, WGKA.