Love can be a source of constant joy, with some frustration mixed in from time to time. If your lover, spouse, significant other, partner — or whatever else you call them — brings bad credit to the relationship, it can be an issue you may want to fix together.
A spouse’s poor credit score won’t hurt yours, and credit reports for both people don’t merge when they get married.
But if your partner continues their poor credit habits, it would affect each person’s credit score if they have joint accounts together, such as a shared credit card. That could make it harder to buy a home and get good credit terms.
Here are some ways to help your partner improve their credit score without jeopardizing yours:
Start with a review
You first need to know how big the problem is before you can fix it. Start by helping your partner pull their credit report, check for errors and report them so they can be fixed.
You’re entitled to a free copy of your credit report every 12 months from each of the three credit reporting companies. Free reports can be ordered at annualcreditreport.com or call 1-877-322-8228. Your name, address, Social Security number and date of birth will be needed to verify your identity.
Tackle their debt
Paying off student loans, credit cards and other forms of debt can improve a credit score, especially if your partner has made late payments in the past. Paying bills on time is one of the best ways to improve a credit score.
Create a family budget and look for ways that both of you can cut expenses. Reducing debt and not taking on more credit card debt can give your financial lives some breathing room and will ultimately make it easier to buy a home or meet other financial goals together.
Pay yourself first
As part of a budget, set automatic payments each month so money is set aside for emergencies, retirement and savings. Otherwise, your paycheck can easily be spent on paying bills and going out to eat or other things that you don’t realize you’re spending so much on.
One goal in helping your partner improve their bad credit is to help them set up good financial habits that both of you can continue together. Paying yourself first is a smart habit to learn early.
If you have other financial goals you want to save for — such as vacations or a child’s college fund — then contribute to those too with automatic deductions from your checking account each month.
Ditch credit for cash
If your partner has a hard time keeping their credit card use in check, then ask them to try not using their credit card for a month and using cash only. You should do the same thing.
Try it out for a month and see if it helps cut back on your family’s spending. It should help eliminate impulse buys, because without cash in your pocket, you won’t be able to buy anything. It will also help you think ahead about what you’re buying each day.
You should both agree to a weekly cash budget for each person. If a purchase is over a set amount, such as $100, then both partners have to agree to it.
Get a secured credit card
For someone with middling credit, a secured credit card can help them improve their credit score without going into debt.
Secured credit cards only allow the user to spend as much money as they deposit in the account. The cardholder puts down a deposit that’s usually as big as the credit limit. If they default on payments, the bank keeps their deposit.
Like a regular credit card, payment activity on secured credit cards is reported to the credit bureaus. A consistent payment history will steadily improve a credit score.
It may take a few years of using a secured credit card to improve a score enough to be approved for a regular credit card, and to then have good enough credit to buy a house, but it’s an easy way to start.
If you’re looking for a good secured credit card, check out our recommendations here
There are a few ways to add your spouse to your credit card without hurting your credit score.
One is to apply for a credit card together. The card issuer will review both of your credit histories. Each person will be required to have their own income, so don’t expect a large income from one person to be enough for approval.
Another option is to add your spouse as an authorized user on a credit card you already have. Then, the account’s history will appear on your spouse’s credit report — so make sure the card you have has a good credit history.
Whichever way you share credit, discuss with your partner how they’ll use the card, payment limits and payment habits so that problems don’t crop up.
The last thing you want when trying to help your spouse improve their credit is to knock down the credit score both of you are working together to improve. Sharing credit with a partner can be the beginning of a beautiful financial life together.