You’re meticulous about your credit. You have good or excellent credit, and you do everything necessary to keep it that way. But what if your spouse isn’t on board with your view of credit? What do you do when your spouse has bad credit?
Unfortunately, this scenario is far from impossible. It’s not even necessarily uncommon. And at the extreme, it can even land you in divorce court.
How does it happen? Having separate debt accounts is one way. You have credit card accounts, and maybe a car loan, and so does your spouse. But while you are maintaining a clean credit record, your spouse is going in a very different direction.
When it Comes to Credit, Not All Marriages are Equal Partnerships
As a couple, you might share many things in common. But it’s hardly unusual for partners in a marriage to have very different attitudes toward finances. In such cases, there’s usually one spouse who tends to be more financially responsible. He may strictly adhere to a budget and save money regularly. She may be obsessive about keeping a clean credit record.
Sometimes, there’s a financially irresponsible partner in the marriage. That partner has less regard for financial parameters, and no serious interest in handling credit responsibly. In many such situations the irresponsible spouse relies heavily on the responsible partner in matters of financial stability.
But if the irresponsible spouse has his or her own credit accounts, the situation can get out of control. You may not even be aware of it until it reaches a crisis level.
The Bad Credit Spouse and the Secrecy Factor
A separate but related issue is credit secrecy. This is unfortunately too common in marriages, particularly when it comes to credit.
The spouse who is having the credit problems may be very reluctant to alert his or her spouse. If they are “good” at hiding it, you may even be unaware that collection notices are arriving at your home.
There may even be high debt levels, or even entire debts, that the irresponsible spouse doesn’t share. This can put the couple in a position where their financial integrity is at risk, despite the fact that the responsible spouse has his or her finances under control.
At the extreme, there could be a repossession, as would be the case with a car loan that has not been paid in several months.
Why You Can’t Afford to Ignore Your Spouse’s Bad Credit
In other cases it may be the responsible spouse knows that their partner has credit issues. But he or she may reason that it’s the other spouse’s problem. That’s true up to a point, but credit problems can extend beyond the irresponsible spouse, and affect the entire household. Here’s how…
Your spouse’s bad credit can hurt household finances. If your spouse has serious credit problems, his or her income can be garnished. There’s even the possibility of the imposition of judgments.
Your spouse might begin to rely on your credit. The spouse with bad credit may begin to rely on the stronger spouse’s credit, when he or she is out of options. It can be difficult for the responsible spouse to completely resist this effort.
Your spouse might need help getting out from under. You may feel a need to “rescue” your spouse from trouble. And that may be a perfectly good strategy, if there are logical reasons for the credit problems. This can include the loss of a job, or the onset of certain medical conditions. But if your spouse has chronic credit problems, you can spend an entire marriage bailing them out.
Your spouse may not be making a full financial contribution. A spouse who has impaired credit may be less able to contribute to the household. Money that should be allocated to household expenses may get redirected into collections, or to prevent credit lines from being closed.
Bad credit can impair your spouse’s ability to earn a living. There are some occupations that you can be barred from if you have poor credit. This can include positions in management, or any jobs involving direct financial responsibility. If your spouse is in such an occupation, his or her credit can hurt their ability to earn a living or find a new job.
You may be unable to borrow for major purchases. On a day-to-day level, a spouse’s bad credit may not have a major impact on household operations. But let’s say that you are going to borrow for a major purchase, such as buying a home, and you’ll need the income of both spouses in order to qualify. That will also require that the credit history of both spouses will be checked and evaluated. If your spouse is deemed to be uncreditworthy, you may be unable to purchase the home.
Taking Control of Your Spouse’s Bad Credit
One of the reasons why a spouse might have bad credit is because they are unwilling to take full responsibility for their predicament. They may also lack in orientation to do so – not everyone recognizes the importance of credit. If that’s the situation, you may need to get third-party assistance involved.
Settling the spouse’s credit problems, while protecting your own credit, is a complicated affair. The best way to accomplish this with any certainty is to get competent legal help.
The trick is to isolate and improve your spouse’s credit situation without dragging your own down in the process. For example, in negotiating with creditors, you may have to be completely out of the picture. If not, one or more creditors could assume that you are also responsible.
Don’t take this task on yourself! Get a good credit attorney to represent the bad credit spouse. That will be the best way to improve his or her credit situation – quickly and cleanly – without risking any collateral damage to yourself.
It may just be that the bad credit spouse just needs a fresh start to help him or her get on board with your way of managing credit. But you will never know until you take the necessary step.