We may be able to pick our partners but we cannot pick their credit scores. Despite looking beautiful in person, some people look very bad on paper. However, poor credit is not reason enough to avoid a relationship because there are ways to handle the situation.
While it is true that bad credit of one person can make joint purchases more difficult, there are ways around this.
If the other person has a very low credit score, it may be impossible for the couple to qualify for a joint credit card or loan. In this case, a cosigner may fulfil the additional guarantee required by the credit provider.
A cosigner agrees to be responsible if the primary account holders do not fulfil their duties.
However, keep in mind that a creditor typically goes after both primary borrowers before pursuing the cosigner for repayment.
Some couples make joint purchases with one individual serving as the primary credit account holder and the other occupying the secondary borrower role. The borrower with poor credit benefits from a boost to the credit rating when payments are made.
The primary account holder should make every effort to repay balances on time and in the agreed amount. Failure to do so will affect the credit ratings of both parties.
Unusual Funding Sources…
Credit for joint purchases need not come from a formal source like a bank, building society, or credit card provider. Some couples get loans from friends or family members.
Those on the lending side of this equation should cover themselves by learning the credit status of each borrower.
They should also make lending agreements in writing that includes a course of action should the borrowers fail to repay the loan as agreed.
Credit Score Risk Assessment
When consumers are considering applying for new credit, they should assess the likelihood of approval before completing an application.
Each time a credit provider checks the credit report, the credit rating suffers. This will make things worse for someone who has a blemished credit history.
Applying for one loan or credit card at a time and waiting several months between applications is the best approach.
Checking the credit score of someone before agreeing to a date may leave you single for life. Instead, learn how to handle the bad credit of a partner so it does not impact future purchases.
The relationship will be unaffected by past financial mishaps and you two can work on improving the credit score together.