Most people bring existing debt into their marriage, so it's not surprising that money is a frequent cause of marital spats. Even if you begin debt-free, the wedding and honeymoon can change that faster than you can say, "I do."
Here's how to manage your credit as a couple and start your marriage on the right foot:
1. Order your credit reports.
You may already know what each other earns, owns and has saved, but credit reports show what each owes. Use your credit reports to create a spreadsheet listing all debts, balances and interest rates.
2. Pay off debts.
Once you know how much you both owe, work to eliminate or lower debt to manageable levels. Don't begin marriage thinking you're just merging debt. Pay off debt in the order of highest to lowest interest rates - typically, that means credit cards first, student loans last.
3. Check your credit scores.
Your credit scores determine what interest rate you'll pay on a wide range of loans, including mortgages, car loans and credit cards.
If you plan to buy a home, check your scores well before applying for a mortgage so you have time to boost your scores if they're low.
4. Keep one card yours, and yours alone.
It's not a pleasant thought, but if you end up divorcing, you'll need your own credit history to borrow money, rent an apartment or even apply for a job.
5. New name? Tell the credit bureaus.
Make your married name known to preserve your credit history.
6. Live within your means.
Agree on a strategy. For example, live on 70% of your income while saving 10% for retirement, 10% for an emergency fund and 10% to pay off debt. Once your emergency stash covers 3-6 months of living expenses, double your debt payments.
7. Be credit-savvy.
Credit cards are a convenience, but many young married couples can't resist using them to buy things they really can't afford. Don't charge things that you can't pay off at month's end, and don't use credit on items you can pay cash for, like groceries.
Dawn Handschuh has earned a living putting pen to paper for 25 years. She worked for 10 years in financial services, writing widely on retirement planning, personal finance and specific investment products such as annuities, mutual funds and 401(k) plans. Dawn is also a regular contributor at http://www.CreditFYI.com, a one-stop destination into the world of credit and personal finances.
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