Whenever a spouse has bad credit, it can hurt your ability to apply for credit together. There’s nothing you can do about it. A lender will see one negative score and reject even a person with a spotless credit record. This is why it is a good idea to help your spouse begin rebuilding their credit record as soon as possible.
Nevertheless, this isn’t always easy, especially if the person refuses to recognize they have a problem.
Sit them Down
The first step is to sit them down and have an honest chat to them about their credit record and what they can do about it. In many cases, people are completely dismissive of their bad credit scores, or they didn’t realize they had a bad credit score.
You should have this chat alongside a copy of the person’s credit record. At the same time, check that the credit record does not have any mistakes on it. Mistakes can make a credit score look worse than it really is.
Lead by Example
We have always assumed that you have a good credit record yourself. Don’t attempt to preach to the choir if you aren’t practicing what your mouth is spitting. You cannot expect anyone to listen to someone who doesn’t lead by example.
Start by practicing good financial habits yourself.
Form a Household Budget
The foundation of good credit is good money management. This is where you learn the basics of managing your finances. A household should know exactly what is going in and what is going out every month of the year.
It doesn’t have to be complex or exact to the cent. As long as you know roughly, where you stand, this will enable you to avoid getting into debt, meet your obligations, and gradually improve your spouse’s credit score.
Begin with Debt
The first priority is to make sure your spouse is paying off any outstanding debts. Student debts and mortgages are long-term debts. These are acceptable to hold and they will not hurt your ability to get credit if you are paying them down every month. Any other form of debt is a problem and should be paid off immediately or at least get a better rate.
If you have many debts, see if you can pay off some of the smaller ones with a lump sum, if you have it available.
Set Up a Joint Account
Sharing an account is a big step, but it could help a spouse rebuild their credit. If your spouse doesn’t have an income, they may have problems getting a credit card because they don’t have any way to pay it back. With a joint account, this becomes possible because you are jointly liable for any associated debts.
This can help your spouse build their credit score without the need to have a separate income for themselves. It’s particularly useful if they don’t have a job because they’re a full-time parent. Be aware that this requires a lot of communication to make it work. Don’t activate a joint account unless you have good communication.
Finally, be aware that this is a process that can take years to complete. There are no quick fixes for credit. Nevertheless, if you start rebuilding as soon as possible, you can reap the benefits faster.
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