Being married involves having a shared vision about the future. Spouses should always plan their individual, as well as joint finances. If not appropriately planned, this could take a toll on the couple’s financial health.
Married couples generally maintain two separate credit records and histories. Thus, both husband and wife should obtain their individual credit information reports (CIR) from a recognized credit information company and check their respective reports. Most married couples in India move from an individualistic credit outlook to a joint one post marriage. In such situations, it would be prudent to analyse both the individual CIRs and take a consolidated action on what is needed to make their financial situation better.
Maintaining a good credit score is easier said than done. A few simple steps can go a long way in keeping a check on your credit history.
Always pay as agreed
All repayments – and missed ones – are recorded on your CIR. Missed payments and high outstanding amounts negatively impact your credit history and credit score. Pay your EMIs and credit card dues on time and as agreed to the lender.
Joint and guarantor credit a/cs
Monitor your joint loans or loans where you are the guarantor regularly , since you are held equally liable for missed payments. Joint holder’s negligence could affect your ability to access credit/loan when you need it. Also evaluate the possibility of moving an individual loan to a joint mode. In this way, both of them can avail additional tax benefits which in turn will result in family savings. Such opportunities also provide each partner to monitor the financial situation of the family and total outstanding.
Inquiries made by lenders because of an application you made for credit or loan can affect your score. Too many inquiries might mean that you’re taking on too much loan or that you’re in some kind of financial trouble and are looking for credit to help you out. In most of the cases, it will be prudent to apply for the loan as joint holders rather than individual persons.
How to improve your score?
Recency of the occurrence of the default is considered by the lenders. As a result, though defaults may have some impact on your overall credit rating, it should not prevent you from availing of a new loan if your payment behavior subsequently has been regular across the loans and credit cards you hold. However, in case of couples, one of them having a better than expected score can compensate to having slightly poor score of the other. Such scores will be viewed complementary in case of joint liability when couples apply for a loan.
The credit score is impacted by a combination of both negative and positive events. Many banks allow customers to rebuild their credit record with a secured credit product and the credit card with a deposit securing it is an example. This is definitely a good means of rebuilding a good track record.
Credit Sudhaar is India’s first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy.
Courtesy: Times of India