debt

Love is grand, but credit is forever

Steve Bucciq_v2.gifDear Debt Adviser,
I love your column and have learned a great deal from you. I'm a 53-year-old divorced woman, own my home (I recently refinanced for 15 years at 5.375 percent) and have virtually no other debt. My credit rating is in the 775 FICO range.

I've worked hard to be fiscally responsible and now my goal is to put more money away for retirement. I'm dating a 60-year-old man, who is wonderful, generous, smart and hard-working, but who inherited about $75,000 in credit card debt from his divorce.

He still owes about $40,000, which he is gradually paying down with his decent income. But his credit rating has taken a huge hit and he's frightened to even look at it.

He wants to get married, but I'm leery about the risks I run in taking that step. Is it possible to maintain separate credit reports and ratings once married? What about buying a house together? Would that automatically "blend" our credit reports?

I hate to base what should be an emotional or "romantic" decision on finances, but it's an important reality and I want to be smart about it. What is your advice?
-- M.J.

a_v2.gifDear M.J.,
Oh my, but spring is breaking out all over! I'm especially pleased to see that 60-year-olds are still in demand. I had my big day last October and my sweetie, who has her own resources, took me to Disney World for a week of celebrations.

Romance is wonderful, but as Marilyn Monroe noted in "Gentlemen Prefer Blondes": "A kiss may be grand, but it won't pay the rental on your humble flat, or help you at the automat."

I think it is smart to want to know all the details about the person with whom you may be spending the rest of your life. In fact, I strongly recommend that people who are considering marriage adopt an "I'll show you mine if you'll show me yours" policy when it comes to credit reports.

Your credit report will remain your credit report, no matter if you stay single or get married. Change only occurs if you secure new credit with your beau -- any new accounts, whether a mortgage for a new house or a credit card, will appear on both your credit histories.

As long as the account or accounts remain in good standing, your credit report and score will continue to be unblemished. If you are going to live in a community property state, you may have more concerns, as debts acquired by one party after a marriage belong to both.

Your beau's credit history will affect you when applying for any joint credit. Both of your credit reports will be reviewed, and his less-than-stellar report will negatively affect the terms of the loan for which you will qualify. In other words, it is likely you won't get as competitive an interest or insurance rate together as you would if you applied individually.

I have two concerns. One is the fact that he and his ex-wife had so much credit card debt. Find out whether he has learned from his experience. Second, anyone who is afraid to confront reality, as in looking at their credit report, worries me just a tad.

Still, overcoming fears together can build a bond between you. Ignoring one can do the opposite. I suggest he get all three reports and scores and take you to dinner. (My wife made me suggest the dinner.)

The bottom line is that if you are "leery" only because of your beau's finances hurting your own, rest assured that your credit history will remain independent of his.

The Debt Adviser, Steve Bucci, is the president of Money Management International Financial Education Foundation and the author of "Credit Repair Kit for Dummies." Visit MMI for additional debt advice or to ask a question of the Debt Adviser go to the "Ask the Experts" page and select "debt" as the topic.

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