It takes great effort and a long period of time to build a strong credit score, but all this can be shattered in a short time. When you're in a relationship with a person who has a poor credit rating, chances are that you will find yourself moving in the same direction. Your partners spending habits will definitely affect you one way or another.
However there are some ways through which you can protect your credit score when you're in a relationship with a person with bad credit. These methods will not only help you to make good financial decisions but may also strengthen your relationship.
Considering having separate accounts
There are several reasons why your other half could have bad credit; it could be financial problems, unexpected medical bills or poor money management skills. Whatever the reason, you may want to keep your money separate if these problems could affect your credit score. Having a joint account may have a negative effect on your credit score. Your partner's spending habits or financial problems may end up spilling over into yours. Keeping separate accounts does not mean you don't manage your finances together; you can still split the expenses but restrict access to your bank account.
Do not apply for a joint credit
If you're in a need of a loan or a credit card, apply independently. Applying together may expose you to higher interest rates. Use your good credit rating to negotiate for the best loan or credit terms. Credit cards in general are one way through which your credit score can be ruined, avoid situations which will make you a high risk borrower and jeopardise future chances of getting a mortgage and other loans.
Work on improving your partner's credit rating
Poor credit may be a threat to a relationship but if handled carefully, you can assist your partner in repairing their credit score. It may be challenging to some, but it is important to cooperate in improvement of credit. If you both are committed to a strong relationship, this may be a chance to improve on their credit score before you merge accounts and make financial decisions together. An open discussion will be required and a genuine choice to make some adjustments in life has to be made.
You should not allow your partner's poor credit to affect your financial health, consider having a separate account but also work towards helping your partner put their financials in order to begin improving their credit score.
Check out other blogs here
Note: The above is intended to be general information and not financial advice. Cashtillpayday does not give financial advice.