Honey, I Wrecked Your Credit

My husband and I were both in our mid-30s when we married. He was a couple of years into a psychiatric practice, and I had more than a decade of magazine experience under my belt. Each of us had been financially independent for quite some time (although as a freelance writer, my independence was of the slightly less lucrative sort).

We had decided to share our lives together, but for reasons unclear to either of us now, we chose to keep our finances separate.

Both of our names were on the mortgage and we had a joint checking account, but I kept a separate checking account and neither of us added the other to our existing credit cards. We even agreed to divvy up certain expenses.

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“I’ll buy the groceries and pay the utilities,” I said blissfully (because everything you utter as a newlywed is uttered blissfully). This left my husband with the “big” expenses: the mortgage, home and auto insurance, vacations, and so on. In short, we were the ideal modern married couple — eager to share our lives but too set in our ways to fully solidify our finances.

No numbers were ever crunched. A thought like, “Gee, honey, since you’re a freelance writer making about $30,000 a year, and sometimes there are four-week gaps between your paychecks, it might be difficult for you to buy groceries some weeks or pay the utilities on time,” never occurred to my usually financially savvy husband.

Likewise, I was too proud yet timid to tell him, “Honey, I really like the idea of being able to help with the finances, but now we’re having kids and I can’t work as much as I used to, and …well, either you have to pay the electric bill the next few months or we’ll be eating by candlelight for a while.”

So I did what any blissfully married woman would do when she chooses not to admit she needs help: I paid for a lot of things with my credit cards.

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    I found myself with a pile of debt and not enough money to pay the bills.

    I attempted to handle the situation on my own (poorly) until eventually my husband caught wind of what was going on and stepped in to clear up my credit card balances. My credit is getting stronger now, but it  took a long time to get it back to where it was.

    Was my husband’s credit hurt by this irresponsible financial planning? Not really. He was able to buy a new car, using just his credit score, with no problem. The saving grace seems to have been that my husband did not add me to his credit cards after I had to close my own. By keeping things separate for as long as possible, my husband’s credit stayed strong while mine had a chance to rebuild.

    Financial experts maintain that keeping the name of the bad-credit spouse away from major purchases will protect the good-credit spouse from reciprocal damage. According to Pam Gantt of Key Mortgage in Pinehurst, N.C., only the spouse with good credit should apply for mortgages, car loans, and new credit cards. In an article for CNN Money, Gantt said she sometimes recommends stated-income loans for the bad-credit spouse because they’re easier to get approved for; however, they have a higher interest rate than traditional loans.

    If a couple already owns a home and wants to refinance the mortgage, taking the bad-credit spouse’s name off the mortgage may be a wise idea, at least for the time being.

    Sometimes the spouse-in-good-standing will feel compelled to “help” his or her partner by signing up for joint credit card accounts. Don’t do it, experts agree. Even if you are approved for a joint account, your good credit will now be sandwiched in with your partner’s bad credit. This is a case where the “what’s yours is mine, and what’s mine is yours” motto is not effective. You run the risk of having two people with credit problems instead of one.

    “Any joint account will appear on both of your credit reports, and the payment history is counted as if it’s your own, whether or not you use it,” Gerri Detweiler, director of consumer education at Credit.com, noted in the Fiscal Times.

    An alternative is to name your significant other as an authorized user on your credit cards. This is what my husband did when I had to wave goodbye to my own credit cards. It allowed me to make credit card purchases (wisely) without incurring any credit dings.

    Try a secured credit card

    Another option — and this is a good one if your spouse is hoping to rebuild credit in a relatively short period of time — is to obtain a secured credit card. The person looking to regain good credit puts down a cash deposit (usually a minimum of $300 to $500) to secure the card. The key here: Don’t charge more than you can pay off in a particular billing cycle. According to Bankrate.com, you should never carry a balance on a secured credit card.

    As with anything related to marriage, the key to ensuring both of you maintain good credit is to keep the lines of communication going. Don’t try to solve your personal credit problems by yourself — this is where the “for better or for worse” vow comes in especially handy. If you find yourself sinking into a money hole, the fastest way to climb out is to talk about it with your significant other and work together toward a solution.

    My money woes early in our marriage taught both my husband and me the true meaning of teamwork. It was a painful lesson, but one that made us wiser in the long run.

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