I don’t have credit cards, and don’t want them. I used to have really bad credit because I got a card in college that I didn’t pay. That was a long time ago, and it’s not even showing up on my credit record anymore. I owe $30,000 in student loans that I’m paying back. I just have a debit card with my bank, and that’s fine because it won’t get me into any trouble.
I’m getting married in August, and my future wife has credit cards. When we get married, will they be mine too? Can I use them? When will they show up on my credit report? If she has really good credit (I think she does), does that mean that mine will be better too? – Andrew
Before you tie the knot, I’d like you to take a crash course in credit. And I just happen to have one in my pocket…
Lesson No. 1: Debit cards are not danger-free.
With credit cards, you can charge more than you can afford to repay quickly, so it’s true that debit cards — which are attached to a checking account — can save you from spending more than you actually have. However, you can overdraw your funds, and fees will be assessed if you don’t keep a close watch on the balance. Debit cards are also less secure than credit cards (which offer powerful consumer protection benefits) when shopping online.
Lesson No. 2: There is no automatic shared custody of cards when you get married.
Your fiancee got the cards that she has today without your credit history or financial information. She is either the only owner of the accounts, or she has co-signers who went in on them with her. Therefore, if she were to get into debt and then couldn’t or didn’t pay the balance, the credit card company could not hold you liable. Moreover, if they sued her for the debt and won, they could take only separate, not community, property. This means they can’t take assets you accumulated or purchased.
Lesson No. 3: You can’t use another person’s credit card.
As I explained in lesson two, the cards your future wife has will not be yours unless or until she adds you to the account. Do not use them.
Lesson No.4: There’s no such thing as joint credit reports.
It’s funny how so many people believe that, once they get married, their credit reports also merge into one. They don’t. Your credit history began when you first borrowed from a financial institution. Your reports list all of your credit activity (except, as you noticed, old negative information that can no longer be legally reported). The only way you’ll share data is if the two of you borrow as a unit as joint account holders on loans or credit cards.
Lesson No. 5: Don’t fear plastic.
I’m not going to try to persuade you to get a credit card when you don’t desire one, but I do want to throw this out there: If you and your spouse would like to buy a house with a mortgage, you’ll want to build a good credit rating. Many homebuyers need two incomes to qualify. So, if you’ll both be in on the loan, the bank will analyze both of your credit reports and FICO scores. You might want to consider getting a credit card with a short credit line and use it for a few things that you need. If you do, pay on time and don’t keep a balance. In a year or so, you’ll make great progress. Then, after you move into your new home, you can stop using or cancel the card if you want.
Lesson No. 6: Work on credit as a couple.
Be sure to talk to your wife about past problems and make a commitment to doing better in the future. Pull copies of your credit report from AnnualCreditReport.com and share them with her. Ask your love to do the same. A healthy relationship requires extensive communication and transparency in all areas — including money.