We're not all about companies and stocks here at The Motley Fool. We're also about couples and cash. Which is why we were interested in the following email we received:
"Bob" and I are getting married this September, and I'm nervous about credit issues. We went to buy a car yesterday, but Bob's credit was so bad, I had to buy the car on my own. I also bought the house on my own because of his credit. How do I maintain my good credit?
We know that each person has a different money personality, and that these differences can cause problems in relationships. But to us, the reader who sent this email could be in a particularly perilous situation, as far as her finances go. Her own credit record -- and future net worth -- is at stake. So here was our (very frank) response:
You can maintain your good credit by not marrying this guy. Sorry, but you asked -- and that's the simplest and best answer we've got.
The second-best answer (because who listens when they're in love?) is to never, ever put yourself in a position where you are responsible for Bob's debts -- past, present, or future. The details of doing this are a downer. It means never buying anything jointly and never co-signing anything. Keep all accounts totally separate -- especially credit card accounts. Keep your own name, at least for financial transactions, and don't buy anything in your name that you can't afford to pay for all by yourself. Unfortunately, chances are pretty good that, sooner or later, that's exactly what you'll end up doing.
Since you didn't mention any extenuating circumstances -- such as Bob went bankrupt paying his parents' hospital bills -- we're making the assumption that Bob got in this spot because of his own bad choices. Keep in mind that you are not the answer to Bob's credit problems. A "fresh start" just starts the play over at Act 1; the plot doesn't change. In spite of promises to do better, the Bobs of this world usually take their rescuers down with them. Sure, people can learn and people can change. People can also promise to learn and promise to change but never do. The fact that he has let things get this bad doesn't bode well for Bob's ability to change.
Of course, if Bob is making his share of payments on the car and house (and we're rooting for him, really!), he deserves part ownership. You should consult a lawyer about how to establish that not only because it's complex, but also because you are emotionally vulnerable right now. "If you love me, you'll do it" is just about the worst reason we can think of for making major financial commitments.
One last cautionary note: If Bob balks at the idea of totally separate accounts and is not just as concerned about protecting your good credit as you are, then our first answer applies in spades.
State laws differ regarding marriage and finance. You should contact a lawyer (believe us, it's a lot cheaper now than later) to see what your state law says about spousal debts and how you can protect yourself.
For more on handling money with your honey, check out The Motley Fool's Guide to Couples & Cash.