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Joint Accounts Archives | Ovation Credit Repair Services

First Comes Debt, then Comes Marriage

By | Credit Scores, Debt

Young couples are delaying marriage and their plans for a family, longer than ever before. The reason, according to a recent report from HIS Global Insight, may be record-breaking student loan debt. Substantial debt repayment plans may leave young couples with less money to pay for a wedding or less savings for a down-payment on a new home. But, the effect of marriage on your finances doesn’t end with your disposable income.

Together, But Separate

Even though you and your partner are uniting your lives, your individual credit reports will remain separate and unaffected by your legal union. Marrying someone with a better or worse credit score will not increase or decrease your personal credit score. Also, any debts that are in your name alone will continue to be your sole financial responsibility – even after you are married. Marriage does not automatically merge all your individually incurred debts into a joint responsibility. Unless…

Exception – Student Loans

Depending on where you live, student loans – even those that were taken-out before marriage – can become a joint liability. If you live in a “common property” state, individual student loans become the responsibility of the couple. If your spouse has outstanding student loans (before marriage) they will become your responsibility after marriage. This allows creditors to come after your assets to pay back your spouse’s student loan. “Common property” states include: Arizona, California, Louisiana, Idaho, New Mexico, Texas, Wisconsin, and Washington.

Marriage may also affect the re-payment terms of your federal student loan. If your federal loan payments are based on a percentage of your income, getting married could mean you will have to pay more. Filing your taxes together as a married couple or simply living in a “community property” state will likely increase your household income and therefore increase your monthly payment.

Joint Accounts

If there is a significant difference in the amount of debt you and your future spouse carry and/or your individual credit scores, you may want to delay creating a joint account. Paying student loans from a joint checking account may inadvertently make that loan a joint responsibility (in non-“community property” states) and give creditors the ability to cease assets from the joint account to pay the loan.

Joint credit card accounts have the ability to either help or hurt you as a couple. If your spouse has a poor credit rating and you add him or her to your account, that account will now appear on both of your credit reports. If the bill is consistently paid on time, this could help your spouse’s credit rating. If your spouse is irresponsible with the card and your bills are not paid on time, both of your credit scores will be negatively impacted.

New Debt

If you are applying for credit together, after you are married, both of your credit scores will be taken into consideration. This makes it very important to know your individual credit scores before making an application for new credit. If one of you has great credit and one of you has poor credit, your new borrowing may be declined or your terms and interest rates may be less ideal.

In “community property” states, any debt incurred by either partner, during a marriage, are considered a liability for both partners. This includes credit cards or loans that are in the name of only one spouse. However, in other states that follow “common law” property rules debts in the name of one spouse remain the sole liability of that one spouse – except when the debt is incurred for the benefit of the family, such as a loan for home repairs.

While pre-nuptial agreements are less than romantic, they may be something you will want to consider to protect yourself from being responsible for your spouse’s individual debts.

Just because someone has debt or poor credit doesn’t necessarily mean that they are financially irresponsible or that you shouldn’t marry them. But it is important to discuss your individual financial standing before you decide to walk down the aisle. Having a financial plan or strategy in place before you are married will mean fewer surprises and greater financial security for both of you.

Picture Credit: www.gobankingrates.com

 

If I Am Married, Should We Work On Our Credit Together?

By | Ask a Credit Expert, Credit Cards, Credit Repair, Debt, Home Buying, Personal Finance, Save Money, Your Credit

Whether you have been married for 20 years or you just got married your credit is a joint venture.  Of course when you first get married your credit is still separate, but the longer you are married the more joined it will become.  This is why it is so important to take care of individual accounts you had before you were together and joint accounts you open while you are together.  Unless you plan to buy everything separately: house, cars, etc. each person’s credit will affect the other.  When you take care of both parties credit it will take care of you and make your finances easier.  You will have better lending opportunities, better interest rates, and now even better job opportunities.

When you have joint accounts and you are late it will report late for both of you.  Sometimes even when you are not joint account holders on an account the late payment will report late on each others reports.  That is why it is important to check your credit reports at least once a year.  If you find that there are inaccurate or incomplete items on either report or both reports, call the specialists who deal with couples and joint credit accounts every day, Ovation Credit Services.

At Ovation Credit we understand that it is best to work on both of your credit reports at the same time, which is why Ovation is proud to offer a couples’ discount for any two people that seek our services. So, sign up for the couple’s program and get our services at a discounted price. We will still set up two separate accounts, one for each of you to ensure the best service and results possible, however the billing will be together to get the discount. Visit http://www.ovationcredit.com/services/discounts.php to learn more about our credit repair programs and discounts. Or give us a call at 1-866-639-3426 Option 2 to speak with one of our Credit Analysts and get started on a better financial future for both of you today.

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