You are ready to take on the world with the love of your life. You both have dreams and aspirations individually and as a unit. You’re looking at buying a house, a couple of new cars and maybe pop out some kids. This is the normal American Dream. Most of us have been given this blueprint, but very few of us have gotten the manual of things NOT to do on our journey to wealth and happiness. Building and maintaining credit is a huge deal to getting all those things. The big question here is should you be building credit together with your partner/spouse or should you keep things separate?
Prepare for The Worse
I am not a doomsday prepper, but I am a person that thinks at least a few steps ahead. The one thing my father would say to us is to be prepared for the worse when it comes to your finances. Now I didn’t always listen to my father, but he said it enough that it stuck in my head. He would also say don’t get caught with all your eggs in one basket. Now, this wasn’t an original thought, but it made perfect sense. I have had many couples come in to get help with their credit. Most had a big life event that landed them in financial trouble and thus their credit took a dive. They applied for things jointly using both of their credit as leverage to get the things they needed or desired. Unfortunately, when couples do that it leaves them with very little options. This is a costly and debilitating mistake, in my opinion, that should be avoided at all costs.
Have Two Full Baskets
I totally understand why a couple would want to intermingle all their finances and credit, but when it comes to credit the best way to help your household is to build 2 strong credit profiles. Avoiding any temptation to jointly apply for credit or loans. Even when it comes to a mortgage, if only one can qualify to add your significant other to the title after the loan closes and you get the keys. This way if one of you gets laid off or falls ill, you can choose where resources should go strategically so to preserve one person’s credit profile. This maintains your family’s ability to have access to the things you need. In other words, you need to create two baskets so that you still have “eggs” if one person’s basket gets dropped, stolen, or lost.
Just so you know, I am not a fan of Authorized users either. Unless the person whose credit you are going to keep is the primary cardholder. In most cases, the person with the strongest credit profile is the one you will want to keep if that decision must be made.
The advantages of a couple building 2 strong credit history profiles is the ability to have double the buying and borrowing power. Borrowing power is the most powerful concept. You will have double the access to funding – OTHER PEOPLE’s Money! Which can be used to buy appreciating assets that can accelerate your journey to that American dream. This is how you build wealth and avoid a lot of pitfalls.
The most important thing is love and second might be how you will keep that love under a desirable roof. All too often couples break up for financial reasons. One person messed up the other’s credit and things just get crazy. Come together with your mate and strategically put together a plan that you both will adhere to. Remember that credit is just as important as how much money you both make and keep. If you need someone to look at your credit and help you with a strategy make sure you schedule an appointment with us.