Helping A Spouse With Ways To Increase Their Credit Score
Anyone who has ever been married knows that a successful union requires plenty of accommodation and teamwork. While that’s an obvious message when it comes to raising children or keeping the house in order, it also extends to maintaining the good credit any couple will need in order to buy a new home or car. This often can mean finding ways to increase a spouse’s credit score. Marital teamwork is especially important if one spouse has a significantly lower credit score than the other. “While married couples don’t inherit each other’s credit score, one partner’s weak rating could sink the family’s financial goals,” writes Farnoosh Torabi in a new article for Money Magazine. Indeed, as the article makes clear, if husband or wife has a FICO score below the mid-700s, chances are the couple will be penalized with higher interest rates should they need to borrow money to purchase a car or a house.
Fortunately, Torabi lays out for couples ways to increase their credit score. They include:
- Paying bills on time: Because your credit score is largely based on whether you pay your credit card and other bills on time, one easy step to take is simply ensuring that happens. Nobody wants to be a nag, so Torabi suggests setting up automatic account alerts to notify your partner when a bill is coming due.
- Don’t be the life preserver: Although it might be tempting to dip into your own savings to erase your spouse’s debt, Torabi notes that doing so might be counterproductive. If your spouse’s debt is the result of poor decisions and reckless spending, giving them a clean slate won’t teach them anything and instead may encourage them to go back to their bad old ways. Instead, she says cutting back household expenses – especially your spouse’s spending – will help pay off the debt and teach valuable lessons.
- Work together: One tool for raising your spouse’s credit score is allowing him or her to become an authorized user on your credit card account. If you together pay your bills on time and in full, both you and your spouse will reap the rewards of a higher credit score.
- Don’t co-sign: While it may be a good idea to add your spouse as an authorized user to your credit card, avoid the temptation of co-signing for his or her new card. Doing that puts you on the hook for whatever debt your spouse incurs, a very bad thing in the event you ever split. Instead, Torabi says to consider encouraging your spouse to get a secured card. Secured cards require an upfront deposit that serves as the account’s credit limit, which means they are easy to obtain. If your spouse can make payments on time and in full he or she will soon see their credit score rise.