Credit Tips for Newlyweds

Figuring out finances may not be romantic, but discussing your views on money and your fiscal fitness before getting married can save you and your spouse some unpleasant confrontations down the road.

"People have different relationships to money," points out Maxine Sweet, vice president of public affairs for Experian, a global information solutions company. "Talking openly about things like spending vs. savings ensures that both partners share the same financial goals." She recommends having a personal finance "date" each month to pay bills and discuss finances -- whether it's setting up a household budget, paying off credit cards or figuring out how to save for a big-ticket purchase like a house or car.

One topic that . The first step in this discussion should be reviewing both of your credit reports for any inaccurate information. Web sites like www.experian.com give you quick and easy access to your credit report and an opportunity to purchase a credit score to learn what positive and negative factors are affecting your credit risk.

Check pertinent information such as your name, previous and current addresses, Social Security number and account details. If you find any inconsistencies on your report, this is the time to dispute them -- before you apply for an important loan.

Credit reporting agencies maintain separate files on each individual, so credit histories will not be combined when you marry. Only jointly held accounts or accounts for which one spouse is an authorized user on the other's account will appear on both credit reports. Your individual accounts remain your own.

When you apply for credit jointly, both of your reports will be reviewed during the application process. Even then, however, information from each report, while it may affect the outcome of getting the loan, will not become a part of the other person's individual credit history. "This can work to a couple's advantage in certain instances where one person's credit is less than perfect," says Sweet.

If either you or your spouse-to-be has had trouble getting credit alone, try setting up a joint account to capitalize on your shared income and one person's stronger history. This is especially important for women; every year, women who have never paid a bill late are denied credit because they have no credit history in their own names.

While we're on the topic of names, if you change your name when you marry, be sure to notify your creditors; so they can start reporting information to the credit reporting agencies under your new name. Your new name will be added automatically to your credit report.

Keep on Top of Your Credit History

Sweet offers these tips to ensure that your credit record will be in good shape when you need it:

• Pay your bills on time -- Creditors look for good credit risks. By regularly checking your credit, you can make sure your bill-paying efforts are being accurately recorded, so creditors and lenders can see your responsible credit habits.
  
• Keep your debt load reasonable -- If a large portion of your income each month is already committed to paying off other debt, lenders will wonder if you may have trouble paying back an additional loan. As a rule of thumb, financial experts say that non-mortgage debt payments should not exceed 10 to 15 percent of your take-home pay each month. If your debts are currently too high, consider ways to pay some down before you apply for new credit.
  
• Open at least one revolving account like a department store card or bankcard -- Unlike an installment loan, such as a car loan where you pay a fixed amount each month, you must personally manage a revolving account. You determine how much you charge each month and how high you let your balance build. How well you manage it is a great indicator of how you will manage other new debts.
  
• Avoid unnecessary inquiries -- Whenever you authorize a creditor, employer or other business to check your credit report, an "inquiry" is added to the report itself. An inquiry usually stays on your report for two years. Lenders may interpret a large number of inquiries occurring in a short period of time as a sign that you are overextending yourself by taking on more debt than you can actually repay (checking your own credit report does not impact your credit rating).
  
• Think twice before closing old accounts -- You should look at other risk factors on your credit report. Closing accounts may hurt your credit score, as this may increase your debt-to-credit limit ratio. However, closing accounts could improve your credit score if you have too many open accounts giving you high potential debt.

These simple steps will ensure that your credit history will speak in your favor when you need it.

For more information on checking your credit report, visit www.experian.com.