If you’re an at-home parent, your credit score may be the furthest thing from your mind, but it’s an important consideration. Even when you’re not earning an income, it’s smart to keep an eye on your credit score.
Married couples have separate credit reports
A common misconception among married couples is that they start sharing a credit report after the wedding. Although some couples take a “what’s mine is yours” attitude when it comes to financial matters, the credit bureaus don’t. Everyone has his or her own credit report, which in turn means that everyone has his or her own credit score. This is true no matter which state you live in and how long you’ve been married.
If you and your spouse pull your individual credit reports, you might notice that they contain some common elements. For example, if you bought a house together, the mortgage will show up on both of your credit reports. But accounts you establish individually will only appear on your report, unless you choose to make your spouse a joint account holder.
The future is uncertain, so it’s smart to build good credit on your own
Now that it’s clear that both parties in a marriage maintain their own credit reports, the upshot is probably obvious: Since spouses can’t share a credit report or score, maintaining good credit individually is essential.
Although it’s unpleasant to think about, there’s always the possibility that your partner could die unexpectedly, or that the marriage could end. In those cases, you’d need to rely on your own credit to purchase a home, rent an apartment or get a credit card. A personal tragedy could be made worse by financial hassles if you don’t build and maintain good credit on your own.
Tips for boosting your credit as a stay-at-home parent
Here are a few tips for ensuring that your credit stays in top form:
- Get a credit card in your own name and use it responsibly; this means paying the bills on time and in full.
- Keep the balance on your credit card below 30% of your available credit at all times.
- Take an active role in your family’s finances, even if you’re not the one who typically pays the bills. At the very least, you should stay up to date about the status of all accounts that carry your name, as these can affect your credit.
- Review your credit report (you are entitled to a free annual credit report from each of the three major credit reporting bureaus) at least once per year for accuracy. If you spot something fishy related to a credit account you share with your spouse, investigate right away. If you notice an error, take steps to have it corrected.
This article was updated Aug. 26, 2016. It originally published July 31, 2014.
Stay-at-home dad image via Shutterstock