by Lynnette Khalfani-Cox
June 8, 2011
4 Financial Questions You Should Ask Before (Or Early Into) Marriage
- 2. What is your credit rating?
- I’m the first one to admit that you might raise an eyebrow by coming out and flat-out asking your honey what’s his or her FICO score. Talk about a romance killer. But that doesn’t mean you still can’t get the 411 on your partner’s credit standing — and do it in a loving, constructive way.
- The key — as with all financial conversations — is to avoid some of the potential minefields that may occur. So don’t start the discussion by saying: “Let’s talk about all the financial skeletons in your closet.†That’s a sure-fire way to put your would-be spouse on the defensive.
- Instead try the following conversation starter, recommended by Bill Hardekopf, the CEO of LowCards.com. “The safest way to go about this is to say: ‘Honey, since we’re about to join forces, it’s a good idea for us to get our free credit reports from the credit reporting agencies, just so we can review everything, make sure there are no mistakes, and see where we both stand.’â€
- A review of each other’s credit reports can offer insights into how financial responsible — or how reckless — each of you has been. But don’t take this as an opportunity to bash your partner. Instead, if they’ve had problems, talk through what got them into their predicament and find out if they learned anything from their credit setbacks.
- Knowing your spouse’s credit rating is particularly important if you intend to get join credit cards or loans co-sign for a home or car. With joint accounts, each of you is responsible for 100% of the debt incurred together.
- Additionally, if one of you has poor credit, the person with good credit may want to make the credit-challenged spouse an authorized user or a co-signer on certain accounts.
- An authorized user isn’t a joint cardholder and thus isn’t liable for any debts. The downside: being an authorized user won’t benefit that party’s credit rating. By contrast, if the person with shaky credit is a listed as a co-signer on an account, he or she will get to “piggyback†off the other party’s good credit, and will enjoy the benefits of having an account in positive standing listed on his or her credit report.