the Credit Counselor
Q: I am getting married soon. My credit is great, but my husband cant even get a credit card in his own name due to past credit problems. How will his credit affect mine?
A: The good news is that the credit histories of spouses are not merged. In fact, it is possible to keep your credit history completely separate from your future husbands, as long as you dont add each other to your existing accounts or get new credit in both your names.
Keep in mind, though, that if you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin) debts incurred by either spouse during the marriage are considered community property. That means if he does start qualifying for credit again, you could be responsible for any debts he incurs while youre married.
Also be careful about helping your husband rebuild his credit by cosigning new loans with him. By cosigning, you will be entirely responsible for those loans or credit cards. I may sound a bit cynical, but I see these problems all the time. While your betrothed may have told you his poor credit history was due to circumstances beyond his control (and that may be true), my experience is that most people with credit problems dont learn the skills they need to keep them from repeating their failures.
It sounds like you and your husband have different approaches to handling money. Its best to sort those issues out before you tie the knot, since money challenges are cited as the number one cause of divorce. Before you walk down the aisle, run dont walk together to a money management course where you can learn how to see eye to eye on this important issue.
Q: Over the past two years I was unemployed and working temporary jobs. I ran up about $20,000 on five credit cards. I am working again full-time and need to lower my interest rates and get on a regular payment schedule. Ive considered credit counseling, but wonder if I shouldnt just try to negotiate lower interest rates on my own. Why not?
A: Its very important for consumers to keep the lines of communication open with their creditors if they are experiencing problems making payments. At the same time, I doubt youll be able to negotiate the same terms that a counseling agency can.
There are several reasons why. First, creditors know when someone enters into a counseling program that they are making a serious effort to repay their debt. Consumers in a counseling program, for example, agree not to take on additional debt. Secondly, creditors know they will be treated fairly when a consumer is in a counseling program. Without the counseling agency as the go between, consumers might feel pressured to pay one creditor (you know the squeaky wheel adage), which could mean other payments slide. Finally, the counseling agency takes on the responsibility of making monthly payments to each participating creditor. That makes it easier for you, since you only have one monthly payment to make to the counseling agency, but it also means the creditor knows they can get a reliable answer from the agency if a payment isnt received on time. Together, all this means that most creditors feel much more comfortable negotiating with a professional credit counseling agency instead of directly with consumers.
-- Howard Dvorkin, founder of Consolidated Credit Counseling Services Inc.
Credit Counseling Services Inc., all rights reserved. To ask a question, or to learn more about strategies to reduce your debt, visit www.ConsolidatedCredit.org or call 800-210-3481.
About The Author
Howard Dvorkin, MBA, CPA, is the Founder of Consolidated Credit Counseling Services,
Inc. and www.ConsolidatedCredit.org.
He is a noted financial expert on consumer credit, personal financial planning,
and tax strategies, as well as specializing in both private consumer debt law
and IRS practices and procedures. Mr. Howard S. Dvorkin has assisted thousands
of individuals and families with life-altering credit, debt, and money management problems.
Reprinted from ArticleCity.com
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