Five Things Every Married Should Know Before Signing
Any Credit Application
and loans for one sex more than the other? If you are married (or plan to be)
I will share with you five vital keys every married person should know
before signing any credit application.
VITAL KEY #1:
According to the Federal Equal Credit Opportunity Act (FECOA) creditors
cannot deny consumers access to credit because of their sex. However, on
average (in surveys) it’s reported that women earn less money than men.
Regardless of what the FECOA states, the relationship of credit to income is
very strong.
In our society if you make less money you will get less credit, period. The
sad fact is that women on there own have less access to credit. It’s for this
reason (I believe) it is imperative that women learn and acquire more
knowledge about credit than men. Knowledge is power; and in the world of
credit that knowledge will often times prove to be priceless, especially for
women. The Credit Secrets Bible is a great way to gain knowledge on how
to improve your credit score ... whether or not you have bad credit or not.
VITAL KEY #2:
If you are a married woman with JOINT credit (meaning all your credit
accounts are jointly held with your husband) you have NO CREDIT
yourself. Many women in America find this out the hard way every year
when they get divorced and lose all their credit privileges since all their
accounts were jointly held with their spouse. If you are a woman in this
position you can greatly benefit by beginning to build your own credit in
your own name starting today! The benefits are two fold.
1.) If your spouse has financial difficulties (for any reason) and is
forced to file bankruptcy or their credit becomes derogatory, you and
your spouse will have your credit in reserve to survive on.
2.) If you ever get divorced down the road (over 50% do and 76% in
the state of California) you will NOT end up in financial hardship due
to no credit and/or derogatory credit. Instead, you will have your
credit to transition to and (believe me) this can be the difference
between sailing off in the sunset or drowning in a storm.
VITAL KEY #3:
If you are currently married (with some credit or no credit) to a spouse who
has excellent credit, you can leverage their credit to build credit in your own
name much faster than if you had to build it by yourself. Later, once you
have established enough accounts on your own, you may choose to cancel
accounts that were held jointly with your spouse.
VITAL KEY #4:
If you are a single woman with excellent credit and are getting married you
may want to think twice about adding your new lover to all your credit
accounts. If he messes up or you end up in divorce down the road your
credit will end up taking the beating (regardless of how many years you
diligently spent building it up). For this reason, I strongly suggest married
couples keep their credit separate. Why?
In most cases spouses have far more to lose than to gain. Naturally, some
credit will have to be joint no matter what you do. If you purchase a home
(which may require both incomes to qualify) this will appear as a joint
account on the credit report. However, the potential abuse with a home
mortgage is almost non existent as opposed to Credit Cards.
VITAL KEY #5:
Spouses have more to gain by each building strong individual credit reports
rather than joining all accounts and building one joint report. For obvious
reasons, banks and credit card companies love the “credit ignorance” of
spouses who join all their credit accounts upon marriage.
Here’s why: If you take 500,000 couples with credit before they got
married, those 500,000 couples actually represent one million credit
accounts and liabilities for the banks and lenders. When those couples got
married, those one million credit liabilities were instantly were cut in half
from one million to only 500,000. For banks this is a very advantageous
situation. For the couples getting married (if they have financial trouble) the
deal is a little raw. If they have trouble, although they are two people, they
are represented by only one credit report. The bank now has the right to go
after two different people for one account (regardless of who was financially
negligent).
For moment, let’s play out the same scenario with a couple which is
financially savvy (note: they’re both on the same “team” but financially
savvy). In this scenario, the couple gets married, but instead of joining
account each builds their individual credit reports. Now this couple (team)
has not one credit report representing them but two. Metaphorically, if the
perfect storm (financially) is to rise, this is the difference between the couple
being in the ocean with two ships instead of one. If the one ship starts to
sink, the couple can always “jump ship” to the second.
While some may criticize this thinking it is no different than buying any
kind of insurance. You buy insurance not because you plan on a problem.
You buy insurance because you are thinking ahead. This type of thinking is
no different. However, if you want to be ahead of the pack that you need to
think ahead of the pack.
I cannot tell you how many times I have talked to loving married couples
in financial trouble who only WISHED they would have known about these
five vital keys before they got into financial trouble. Take them, study them,
apply them to your life. As I heard one woman put it “In business and in life
I’ve learned to expect the best but plan for the worst”. I thought her words
were brilliant. However, I have found that when I expect the best… many
times I tend to get it! Take these five vital keys. Study them. Apply them.
Then pass them on to someone else who can benefit from them.
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