The Friend of the Court: Building a Strong Credit Profile
It is important that when entering into the bonds of holy matrimony, each partner must commit to building a strong individual credit profile while building a solid joint credit history
. That means keeping debt under control, cutting costs where appropriate, merging expenses with a prospective life partner to get the benefits of "economies of scale," making all payments in a timely fashion and not overspending. Here are some other useful tips:
- When planning the wedding, don't take on suffocating debt to stage the event of the century at the most spectacular venue in town. If you're paying for it because your parents or in-laws can't afford it, be sensible about the ceremony and reception and splurge on the honeymoon (if you must). Creating five- or six-figure debt to finance your wedding and honeymoon could well damage your individual or joint credit rating, and make it difficult to live the life you dreamt about when you walked down the aisle.
- Avoid digging a hole from which you can't escape with credit card debt. Like wandering into quicksand, you sink hopelessly into debt as exorbitant interest rates proliferate and multiply faster than rabbits.
- By keeping your costs down and building a solid credit history, you establish yourself as a couple ready to build savings, develop a positive mutual credit rating, and seize the world rather than be crushed by it.
- When you need to take out your first loan as a couple, you'll be eligible rather than rejected and denied. With a strong credit rating, minimum debt and growing savings, you'll be viewed positively by banks and more likely to be approved.
- Weak credit can also affect a couple's ability to take out a joint credit card. That's another reason to lower debt or eradicate it. The quicker that bad credit is extinguished, the faster you can embark on establishing positive joint credit and achieving your dreams.
There is no substitute for talking things out. You're a couple now and everything you do from here on in should be done as two-some, a partnership, and a marriage. Don't hold back, don't fudge, don't mislead and, of course, never lie. Be straight, get everything out in the open, and reach an agreement in principle about how you plan on straightening out any bad debt from the past, cleaning up any credit issues, and establishing a positive joint profile and track record for the future.
Stanley Kubrick once directed a film entitled "Eyes Wide Shut," but in this case, eyes wide open is the operative way to behave. Be open with your spouse; learn to talk things out. Collaborate on establishing positive joint credit, fixing any problems of the past, and embarking on a new sterling financial record. This will lead to material happiness and emotional health as well.
This work is the opinion of the columnist and in no way reflects the opinion of ABC News.
Adam Levin is chairman and cofounder of Credit.com and Identity Theft 911. His experience as former director of the New Jersey Division of Consumer Affairs gives him unique insight into consumer privacy, legislation and financial advocacy. He is a nationally recognized expert on identity theft and credit.