Players-Sb

Julie, a 20 twelvemonth old full clip college student, married Bert, a 24 twelvemonth old medical clerk. On the twenty-four hours she signed their marriage license, her credit report score began to worsen.

Julie knew Bert had been previously married, and though that marriage had lasted only two years, it was long adequate to distribute a bad credit virus onto her and Bert's joint credit report score.

Bert's ex-spouse, Camille, already had delinquent credit before she married Bert. And, she had continued being delinquent during her marriage to Bert and after the divorce. Unbeknown to Bert, Camille's bad credit had passed onto him when he married her, and then passed on to his new bride, Julie.

Why? Because when couples marry, assets; as well as debts, go joint. Unfortunately, divorcement makes not invalidate financial obligations, even if a judge stipulates in a divorcement edict which partner is responsible for re-paying which bills.

But this is just the beginning of Julie and Bert's bad credit horror.

Julie had racked-up respective thousand dollars in student loans. After she married Bert, she dropped out of college and that action initiated the loan repayment period. Like Bert, she also have a full clip job, but it's hard to pay the debt because of other bills.

In the divorcement edict with Camille, Bert retained ownership of the car which still had loan payments due. Camille received all the piece of furniture in the divorcement settlement. Bert and his new bride, Julie, had to purchase new furnishings for their apartment. Additionally, they had spent a batch of money on their wedding ceremony and honeymoon. Together they had a batch of debts to repay, and some measures were being paid late. Their credit score continued to dive.

They got an idea. They would balance transfer Julie's credit card and Bert's credit card to a new credit card that offered 0 interest balance transfers for the first six months. Unfortunately, since their credit score was bad owed to excessive debt-to-income ratio and late payments, they were rejected by the card issuer.

Bert refinanced his car to lower the monthly payment. Since his credit was bad, he had to widen the term (repayment duration) of the loan an further two old age and at a higher interest rate than the original loan, but he was able to get $1,000 in equity. He and Julie used the $1,000 to catch up on their measure payments.

Six calendar months later, now that they had caught up on their payments which also lowered their overall debt-to-income, they reapplied for the 0 presentation balance transfer credit card and were accepted. They transferred their credit cards to the 0 presentation card.

Three calendar months later, they received a missive from the new card issuer that declared their 0 interest time period had been terminated. Why? Because Julie and Bert had mailed an auto loan payment a few years late. The late payment was reported by the auto lender to a credit reporting agency which lowered their credit score. The new card issuer's terms required Bert and Julie to keep (or improve) their credit score by making all payments (not just payments on the card) on time. In improver to terminating the 0 interest period, the issuer also increased their APR rate.

Other than ordering credit reports before marriage, what could Bert and Julie have got got done differently to avoid the bad credit virus?

Before divorcing Camille, Bert should have made certain all debts assigned to her would be repaid, and repaid on time. Obviously, the lone certain manner to have got got done this would have been for Bert to do the payments himself. He could have got got refinanced his auto after divorcing Camille, used the equity to final payment her debts, and then have her repay him. He should have got got got also ensured that all joint accounts with Camille had been closed to forestall further charges.

Julie should have continued her full clip student status; not only to better her career opportunities, but also to detain the student loan repayment requirement.

And there are obvious things Bert and Julie could have done, such as as purchasing used piece of piece of furniture whenever they had available cash instead of charging purchases for new furniture on their credit cards. Additionally, they could have got spent less on their wedding ceremony and honeymoon.

Marriage and joint debts can indeed distribute bad credit like a virus. Don't trust upon a divorcement edict to separate you from bad credit.