Marriage is more than just a socially and legally sanctioned union between people; it also entails a lot of rights and obligations, which make couples inextricable in many senses. One of these aspects is the financial lives of the couples. Your spouse’s credit score can influence your economic life, even if you keep your finances detached. 

While your spouse’s bad financial decisions may not directly affect your credit score, it can have long term repercussions for you. Your spouse’s credit  and spending habits can impact your finances in a number of ways. For instance, if you attempt to acquire major assets together e.g. if you want to purchase a home together with your spouse, your spouse’s woeful credit history can have a detrimental effect on your chance of doing so.

Marriage and Finances

If you shoulder the lion’s share of financial liability as a couple, it would have severe repercussions on your financial stability. To avoid such a situation, it’s better to ensure both of you have an equal stake in your debts as a couple, to ensure that you don’t get overwhelmed with the responsibility of paying off your loans.

It is important to help your spouse improve their credit score considering the various benefits of a good credit score. You can do the following to help your spouse achieve a good credit score:

Formulate a Household Budget

Marriage and Finances

Good money management habits lie at the core of every good credit score. The most basic of such habits is coming up with a budget or a plan to decide how you’re going to spend money. If you don’t have one, it’s best to come up with one as soon as possible. Such a plan should be formulated keeping in mind your income and expenses. A budget will provide clarity about your financial capacity and give you an idea whether you need to restrict your spending or not. 

Get Informed About Credit and Good Credit Habits

Marriage and Finances

It may seem unnecessary but most credit mishaps happen due to lack of awareness about the basics of credit and good credit habits. If your spouse is having credit issues, you may want to talk to your spouse and help them understand credit bureaus, credit history, and how credit reports work. Explain that late payments have a severe repercussion on one’s credit and timely payments are important in building good credit and spending habits. Going over credit reports aka Bank statements, and identifying the problem areas would be a good start. After that, you can formulate plans to fix them. For instance, you may want to take care of past due balances as it would reflect poorly on your credit.

Build an Emergency Household Fund

Marriage and Finances

Once you’ve come up with a household budget, the next thing that you should do is build an emergency household fund that you and your spouse can access whenever required. Such a fund would prevent both of you from resorting to unnecessary loans. Ideally, you should have at least three to five months of expenses in your emergency fund to take care of any contingency that may come up.

Pay Off Debt

Marriage and Finances

Too much Debt is detrimental to anyone, talk less a married couple. It’s advisable to settle one’s debts to the greatest possible extent in order to boost one’s finances & spending habits. You may want to take a look at your bank statements to figure the extent of your debts and compile a list of debts to ensure clarity in this regard. After this, you can come up with a plan to settle your balances. You can take care of your debts by prioritizing one debt while paying the minimum towards the others. Doing so would help you to tackle your debts in an organized manner.

Encourage Your Spouse to Make Timely Payments

Marriage and Finances

If your spouse has a bad spending history, then the easiest way to boost your spouse’s finances history is to ensure that they make timely payments to settle their debts. This will help to create a positive credit history. So, ensuring that your spouse pays down their debt in a timely and regular manner can go a long way in increasing your spouse’s finances. It would be advisable to have financial planning meetings weekly to ensure that both of you are on track in terms of repayment of bills and debts.

Start a Joint Credit Card Account

Marriage and Finances

This is a good alternative to the strategy of having your spouse as an authorised user to your credit card account because it would end making you solely liable for charged incurred on the card. However, it is advisable to strategise as to how much you would be using the card and for what payments. There needs to be clarity between both of you regarding the purchase limits and payment habits to make sure that doing so would have a positive effect on your finances aand not end up as being another liability for both of you.

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