Dear Moneyologist,
Can I protect my credit and not lose my family? I live in Wisconsin, which is a community property state. My husband does not have the best financial history, which has led to him filling bankruptcy prior to our marriage. He has now attempted to get a loan several times and he has not been approved. It is very concerning to me because we are married, I am liable for any debt he carries. I am not comfortable with acquiring new debt, but also fear this will begin to place a strain on our marriage. His bad credit score is ruining our marriage. I have placed a freeze on my credit with all three credit bureaus. Is there anything else I can do to protect myself?
Jacinta in Milwaukee
Dear Jacinta,
His credit score isn’t ruining your marriage. But his inability to manage his money is destroying your peace of mind. And with good reason.
You are not responsible for your husband’s debt (unless you have co-signed loans) and your credit score and his credit score are calculated separately. If your name is on a bill or a credit card, and you pay it on time, then you (and you alone) reap the rewards of that.
You’re not the only one to worry about your husband’s credit score, but it’s important to know where the line is drawn. This stepmother wrote in because her husband had co-signed on his children’s student loans. She was worried about her husband’s finances and how that would impact her if, for instance, he died or one of her stepchildren died. But even if your husband went bankrupt, that would not impact your credit score.
A low credit score could increase the finance charges on a $20,000, 60-month car loan by more than $5,000.
A credit score between 661 and 780 is considered good and one between 781 and 850 is regarded as excellent, according to financial website Credit.com. The site rates fair credit as between 601 and 660, poor credit between 501 and 600 and bad credit as anything below 500.
There are ways it your husband’s bad credit score can impact you: If you co-mingle your finances to take out a mortgage or a loan (or if you feel like you will be carrying the financial load now or in retirement) I understand why you are spooked. If you want to buy a home with your husband or even a car then, yes, it becomes your problem. Banks will look at your combined credit score and you will either (a) be refused or (b) end up paying a higher rate of interest. A low credit score could increase the finance charges on a $20,000, 60-month car loan by more than $5,000, according to the Consumer Federation of America, a consumer advocacy group.
Don’t miss: My boyfriend has $40,000 in student debt and two kids — should I run for the hills?
It’s not surprising that some single people take credit scores as the most important number when choosing a partner. Nearly 40% of adults say knowing someone’s credit score would affect their willingness to date that person, according to a survey released earlier this year of 1,000 adults by personal finance website Bankrate.com. It’s a more important factor for women (43%) than men (32%) and college graduates (47%) than those with just a high school education (29%). And 50% of people with annual household income of $75,000 or more would prefer to know someone’s credit score before dating them.
You have the cut of your husband’s jib. Don’t sign any loans with your husband and, as his wife, try to help him budget with the help of a financial adviser, if necessary. That means paying bills on time, paying his taxes promptly and not over-extending himself.
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