ASK A FINANCIAL PLANNER: 'Should I open a joint credit card with my spouse?'

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Certified financial planner Sophia Bera answers:

I just got married. My spouse and I want to open a joint credit card. Should we open one, or should one of us become an authorized user on the other's card? What's the difference?

Congratulations, newlyweds! I’m glad that you’re thinking seriously about establishing excellent credit.

Keep in mind that while there are joint lines of credit, there’s no such thing as a joint credit history. No matter what you decide to do, you and your spouse will have your own credit scores.

But having joint credit cards or loans means that the actions of your spouse can affect your score, and vice versa.

First, let me explain the differences, upsides, and downsides of joint credit cards versus adding an authorized user.

Joint credit card: In this case, you both apply for the credit card together and share the responsibility of paying the bills — meaning you’re both on the hook if you accumulate any debt. Not using the card responsibly will affect both of your credit scores, but on the plus side, being diligent about paying your bills will raise both of your scores.

Now to be the bearer of bad news (sorry, that’s my job sometimes!): If you and your spouse separate and you close the account, it could lower your credit limit, raising your utilization rate and negatively affecting both of your scores. If one of you dies, the other person must shoulder the responsibility of paying off any debt on their own.

I know it’s not fun to think about the sad stuff, but it’s something to consider as you make your choice. While you gain convenience when you share a credit card, it’s important to read the fine print.

Authorized user: Let’s say you’re the credit card holder and you add your spouse as an authorized user. This could be a good option if you have excellent credit, but your spouse’s credit score is low. The authorized user can piggyback on your account, and if you both use the credit card responsibly and pay bills on time and in full, your credit remains great and your spouse’s score can go up. Win-win!

And now for some potential downsides. You’re the principal cardholder, and so you’re 100% responsible for all charges, even those made by your spouse. You’re also completely responsible for any debt accumulated, so if your spouse isn’t a responsible credit user, their spending could negatively affect your credit score.

So what should you do? If you’re both responsible users of credit, a joint credit card can make paying for joint expenses easier. If one of you has a much lower credit score, adding an authorized user is a good option.

Just remember to communicate about what you use the card for so when the bill is due, there are no unfortunate surprises. One spouse shouldn’t hand over total control of the family finances to the other — I recommend you both keep track of where your money is going.

I also suggest you both maintain separate credit cards as well. Not only can you use those for your own expenses, but if you like to rack up credit card rewards points, both of you working towards reward bonuses means double the points! If you’re using credit cards responsibly, you should make sure you’re maximizing your credit card rewards as well.

Sophia Bera, CFP® is the Founder of Gen Y Planning and has been quoted in The New York Times, Forbes, Business Insider, AOL, The Wall Street Journal, and Money Magazine. She tweets, travels, and loves helping millennials manage their money more effectively. Curious? Sign up for the free Gen Y Planning Newsletter.


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My boyfriend is bad with money, will my credit score be affected if he uses my address for credit applications?

Published: 12:54 BST, 30 April 2013 | Updated: 12:54 BST, 30 April 2013

I have just discovered my partner, who lives in my home, has been getting credit cards using my address.

I am worried because he isn't in secure work and does not have a good credit history.

What can I do about him using my address for credit and if he doesn't pay, will my credit rating be affected? C.M

Card conundrum: Will my boyfriend's poor record with money affect my credit rating?

Adam Uren, of This is Money, said: Provided you two handle your finances separately, then your partner's financial dealings should have no bearing on your own credit rating.

Where his record would come into play is if you have already linked your finances, in which case his poor record could count against you and prevent you from getting the best deals on credit in the future..

James Jones, of credit rating company Experian, said: 'If he lives there then he's probably entitled to put that address on any credit application he makes - it's up to the lender to assess his suitability for any new credit.

'His credit activity could only impact his partner's credit rating if they have already already become financially linked - such as taking out a joint bank account or a loan.

'If they haven't done this, then his credit simply won't be visible to her lenders and won't affect her credit rating. She certainly wouldn't be liable to his debts, were he to get into difficulties, unless of course her name was also on the accounts.'


Is My Rental History Affected by My Spouse’s Credit Record?

Will my bad credit affect my new spouse

Renting an apartment can be a challenge, especially if the renter does not have good information appearing on his rental history report. But when a couple is involved in the renting process, they have options to consider, which might make the rental process easier.

When applying for a new apartment or home to rent, a couple can choose to put one person’s name on the lease or both names. If both members have good credit information appearing on their rental history reports, they should both appear as good candidates to a landlord. If they put both their names on the lease, rental payment history information will be recorded in each report.

However, if one spouse has a bad credit record, it might be a good idea to only have one name attached to the lease. Each person’s rental history report is unique to that person. Individual records like credit reports and criminal records do not cross over to another person’s rental history report. The person with the better report is the better candidate to apply to rent the unit.

One thing couples should keep in mind is the spouse whose name is on the lease will be responsible for all conditions of the lease agreement with the landlord. This includes paying the rent on time, obeying the rules stipulated in the lease agreement and fulfilling all terms of the lease. And only the person with their name on the lease will have information reported to their rental history report.


Your Credit Score and Your Marriage

Your Credit Score and Your Marriage, When a couple first starts talking about marriage, they often discuss their hopes and dreams, how many children they want, and maybe even finances to some extent. Few couples, however, talk about their

respective credit scores. While it’s not the sexiest topic, your future spouse’s credit score could have a significant effect on the interest rate you receive when the two of you decide to buy a home in the future.

Aside from this, your significant other’s credit score is a good indicator of their financial habits, and could reflect a nasty habit of paying bills late, massive amounts of credit card debt, or even a past bankruptcy.

Down the road, issues like this have a tendency to come back to haunt you, and can put a serious strain on both your finances and your marriage. So before those wedding bells ring, you may want to talk about your credit and what it could mean for your future financial decisions together.

Does My Spouse’s Credit Score Affect Mine?

Contrary to what many people believe, your credit score does not combine with your spouse’s after you get married, according to MyFICO, the consumer website of the Fair Isaac Corp., the creator of the FICO score (the most frequently used credit score).

The two of you will continue to have the same credit score when married as you did when you were single.

However, this doesn’t mean that you can always rely on the person with the highest credit score when taking out loans, or that your spouse’s financial moves won’t ever affect your score.

Along with evaluating your joint income, mortgage lenders will consider both you and your spouse’s FICO scores when you apply for a home loan, MyFICO explains. Another instance where your spouse’s credit affects yours is in your joint accounts.

If you share credit card accounts with your spouse, and he or she maxes out those cards, maintains high balances on those cards, misses payments on those accounts, or makes other irresponsible financial decisions regarding your shared credit, it will affect your credit as well as theirs.

If you plan on taking out a loan, and your spouse has a bad credit score, your best options may be to see if you are eligible for the loan using only your income, or to simply wait until your spouse improves his or her score before pursuing the loan, according to Kiplinger’s Personal Finance.

Remember that even if you have a credit score above 800, it may not be as effective as it should be in landing you a low interest rate if your spouse has a credit score below 600. Many couples work together to improve the credit score of the person with bad credit.

This process starts with ordering a credit score report to find out your starting point, and making a concerted effort to correct any mistakes in the credit report, pay bills on time, and keep credit card balances low. Most married couples who watch their credit closely and take steps to improve it will see positive results over time.

The fact that your credit report has the potential to negatively impact your ability to get a job is unfortunate for many people who are trying to get back on their feet financially.

After all, if you are trying to repair your credit after experiencing some financial setbacks, you probably need a steady income to do so. Then again, it’s more difficult to receive a steady income if the information on your credit reports keeps you from certain jobs in the first place!

Even so, this is the reality job-seekers face: it is perfectly legal in many states for employers to request your credit reports as part of the job screening process, provided you give permission to release the information, according to Forbes.com.

Employers consider a job applicant’s credit report because it can be a strong indicator of an applicant’s ability to make solid financial decisions, keep their commitments, and meet deadlines.

These qualities are particularly valuable for jobs in banking, accounting, or finance that involve handing other people’s money. In addition, the information on your credit report may also be valued in office management occupations that entail financial tasks. Source