One of the happiest days of your life is the day you get married. It’s the day two lives are joined together as one. While the romance of marriage is no doubt wonderful, you should also think about your finances after marriage.
Many people have different views about finances after marriage. But it makes sense as there are a number of different things to think about when dealing with this topic.
Let’s take a look at a few options. What do you want to achieve in your new life together? What the financial opportunities might be? Especially if you are marrying someone with debt.
The first thing to look at is your bank accounts. At the time of meeting and being partners, you had your own separate bank accounts. These accounts maintained and perhaps open a joint account for savings and bills. Having separate bank accounts simply means being able to manage your own spending and hopefully, your own savings.
Although you may have been going together for some time, a separate bank account is a good option. Bills that are under both names can be paid from a joint account. However, daily spending can be from a personal account.
Managing Personal and Shared Debts
One of the things that couples will have to face is how they will manage any debts that either person may have. Depending on the amount of debt, the decision might be to make each person responsible for their own debt or decide to pay it off together.
Also, exactly what type of debt is it, or are they? A lot of credit card debt might mean they have a lifestyle in which they like to spend and have problems managing their finances after marriage. While student loans are considered as being an acceptable debt, you still have to work out who will be responsible for it.
Your Credit Scores
The other thing to look at is the credit score each of you have. The important thing to remember is that there is no joint credit score for you both. Each individual has their own credit score. Having said that, if one person has a dreadful credit score and a lot lower than yours, it can have a drastic effect on your ability to get credit should you apply for a loan as co-signers.
If you want to do any loans under joint names such as a home loan, car loan or a personal loan, the lender will look at both the credit scores as a whole to make an evaluation. Your credit can affect another way with your shared bank accounts if they incur any debt. All negative reports or financial activities will bring down your score.
Looking at Your Credit Reports
While it’s not the most romantic aspect of a relationship, there is nothing wrong with you both agreeing to look at your credit reports.
Make sure they are accurate and be honest with each other. Look if there are any negative aspects that have resulted in a lower credit score.
You don’t want to find out after your marriage that your significant other half has been bankrupt, had a foreclosure on a house, or defaulted badly on loans.
After the Honeymoon Period…
While it’s an exciting time, after the honeymoon things can get serious when it comes to money. It’s important to ensure that you are both aware of finances or other financial decisions after marriage.
There is always the possibility of a prenuptial agreement if you are thinking about the troubles in finances as a couple.
Repairing Bad Credit
If one of the partners has a poor credit score, by opening a joint account and adding that person’s name as a joint owner, that person will benefit from the positive payment history. In fact, taking out a small loan as a joint account and keeping the account up to date with payments on time will work wonders when it comes to applying for a larger loan such as a car loan or a mortgage.
In response to the question of whether your good credit score is affected by marrying somebody with bad credit, the answer is, ‘no’. Individual scores remain as they are with the credit reporting bureaus. It’s only when you combine accounts that your credit score gets impacted.