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Come Clean to Your Spouse About Your Credit and Debt

June 10, 2014
Credit Card Basics, Credit Cards, Credit Score
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Debt and credit are still taboo topics in the United States. Some people are so ashamed of their debt loads and credit scores that they may hide this information from their spouses. This type of financial infidelity can quickly backfire. Let’s discuss how hiding your debt or credit situation can be detrimental to your marriage.

Reasons why hiding your debt or poor credit may backfire

Besides depriving yourself and your spouse of an open and honest marriage, there are several reasons why hiding your debt or poor credit is a bad idea. Here are three of them:

Not being financially prepared for kids. The 18-years-plus commitment that comes with having children isn’t cheap. According to a 2012 study by the USDA, one child will cost you $241,080, not including any college savings or possible financial support once your children reach adulthood.

If you and your spouse decide you’re ready to procreate and you’re hiding debt, you may be biting off more than you can chew. As a general rule, it’s a good idea to pay off any consumer debt before having children. Your spouse should know about your debt load so you can decide together whether or not you can afford kids at this time.

Not getting approved for a mortgage at favorable terms. A house is likely the most expensive item you’ll ever purchase in your life, and you’ll want to get the best rates possible to keep costs down. More than that, you don’t want to be struggling to make debt and mortgage payments at the same time.

If you and your spouse decide to purchase a home, he or she needs to know about your debt or low credit situation. Chances are, both of your names will be on this purchase and both credit scores will be pulled. Tell your spouse what’s up, or the mortgage officer will.

Not being able to quit a job. One of you may want to pursue alternative work situation — like starting a business or staying home with children — and you’ll want to have stable financial footing. If you hide debt, your spouse may think you’re in better financial shape than you actually are.

If you or your spouse decides to pursue non-traditional work, you need to be financially able to do so. Your spouse needs to know if you have hidden bills that may keep this from becoming a real possibility.

» MORE: How to pay off debt

How do I tell my spouse what’s going on?

Whether or not you fit one of the above scenarios, you need to come clean to your spouse as soon as possible. It’s a tough conversation to have, but it’s definitely necessary, especially if your financial lives are intertwined. Here’s what you should do:

  • Figure out how much debt you have and/or how low your credit score really is. Find out exactly what you’re dealing with. Write down a list of your creditors, balances owed and interest rates. To get your credit score, purchase it, because the free scores are not typically the scores used by lenders.

  • Sit down with your spouse and explain your situation. As difficult as it may be, show your spouse how much debt you have been hiding or how low your credit score is. There’s strength in numbers, and having someone help you with this burden will likely make it easier.

  • Make a plan to tackle your problem together. Even if you generally keep separate finances, it may be helpful to include your spouse in your debt-payment or credit-increase plans. Your spouse might have ideas you haven’t considered, and most people are more likely to be held accountable when another person is involved. Work together to get your finances in shape for future credit needs.

Bottom line: Keeping secrets from your spouse isn’t advisable, but we understand that everyone makes mistakes. The best thing you can do if you’ve been hiding debt or poor credit from your significant other is to come clean and start working to fix it together.

Sharing secrets image via Shutterstock