The time for newly married couples to discover each other’s credit score should not happen when applying for a car loan or filling out mortgage paperwork while house hunting for the first time.
Yet, all too often those money talks either keep getting kicked down the road or don’t happen at all, meaning the reveal generally doesn’t make for good news.
With summer wedding season in full glory, it’s important for couples to remember they need to be on the same page financially speaking.
Are there any golden rules that work best on keeping things separate or joint and other such matters?
No, but all new couples need to be talking regularly about money, and whether it’s once a week or once a quarter, review account balances, cash flow, and big bills coming due.
Keep in mind that the unexpected invariably happens but approaching money issues as a couple will keep the surprise bills to a minimum.
“Regardless of the tactics you employ, you certainly should communicate about the general parameters—how much of every paycheck goes to this separate or “fun” account versus what’s needed for shared essentials,” said Ted Rossman, a credit expert and senior industry analyst at Bankrate.com and CreditCards.com.
“Are you on track with the monthly bills as well as future planning, such as saving for a future home purchase, retirement, your kids’ college educations?”
Should Couples Merge Their Finances?
Rossman pointed to a recent Bankrate survey, which found that 57 percent of Americans who are married, in a civil partnership, or living with a partner have at least some separate financial accounts. That includes 34 percent who have a mix of joint and separate accounts and 23 percent who keep their finances completely separate.But separate shouldn’t mean secret. The Bankrate survey also found 32 percent of people in live-in relationships engage in deception ranging from secret spending to secret debt, secret credit cards and secret checking or savings accounts.
Should Couples Open a Credit Card Together?
I think each partner should serve as the primary (or sole) account holder on at least one credit card account. It’s important to establish a credit history in your own name, and it’s beneficial to have an account that belongs to you in case your spouse dies or you get divorced. It might also make sense to add the other person as an authorized user on one or more accounts if you like the idea of streamlining things and combining spending and rewards.Here’s another thing: You and your spouse could each get your own sign-up bonus if you apply for a card in your own name. That could be a great way to rack up twice as many rewards points to fund a honeymoon, for example.
There are credit scoring impacts as well. There’s evidence that the primary account holder’s credit score benefits more from positive payment habits.
Should Couples Have a Prenuptial Agreement?
It makes the most sense when one partner has substantial assets, such as a large inheritance, sizable investments, real estate, or a business or even significant debt, Rossman said.Another likely scenario would be if someone has children from a previous relationship.
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