Dealing with debt and money is never easy, especially if you’re a fan of the 7*Life and a seamlessly big spender. However, if you’re living with a partner and you’ve both got financial worries, getting to the root of the issue can feel almost impossible.
Luckily, approaching the situation as a couple could help you find a solution faster. Working through the issues together empowers you to think compassionately and work towards shared goals too. Where financial security and independence is concerned, your credit score is vital.
In this guide, we’ve outlined five ways to work on your credit score as a couple.
Open a joint account together
Couples should have control over their finances. This life priority is essential, especially for anyone planning on borrowing large amounts of money to make a purchase or save for a milestone occasion.
Establishing and using joint current accounts wisely can help couples improve their individual credit profiles and build credit. While this step involves a lot of mutual trust and understanding, it can be transformative when it comes to saving and making more money.
Take responsibility for debts
Next, it’s essential that both of you should determine responsibility for existing and future debts. From there, you should discuss your plans for repayment.
One option is to split your debts equally, but this approach might not be the most practical if one of you earns significantly more. Similarly, if one of you has caring responsibilities or cost commitments for work, it might not be a practical approach. Once you’ve established a plan, you can look for new ways to build your credit score.
Make your spouse an authorised user of your card
When someone else is officially authorised to use your credit card, your credit history is automatically added to their report. The effects of this change can be very strong, so make sure that you’ll have a positive influence before you go ahead.
This credit-building approach works even if your spouse doesn’t physically keep your card on them. If you stick to good borrowing habits, you can build credit history for both of you.
Make regular payments on time
At the very least, you should both aim to make your expected payments on time. Whether they’re for your mortgage or any other type of loan, timely repayments reflect positively on your credit score. Likewise, missing payments – whether it’s your gym subscription or your monthly rent – could trigger a dip in your credit score. Keep an eye on your incomings and outgoings to ensure that you’ve always got enough money in your account.
Understand your credit history
Finally, you and your partner can help one another to improve your credit scores. Part of the process involves understanding your credit report and transaction history, and it sometimes takes a fresh pair of eyes to help you spot areas for improvement.
Monitoring and managing individual credit reports is essential for improving credit as a couple. Having very little or no credit history could make it more difficult for banks, brokers and companies to assess you.
Handling credit and debt management together with your partner can offer various advantages. From increased borrowing capacity and improved planning, shared financial responsibility is beneficial across multiple areas of life. By combining resources, incomes, and techniques for managing money, partners can reach new financial goals. These may include accessing higher credit limits and securing lower interest rates.
