What Impacts Your Credit

Let’s face it, stuff happens. And when it does, it can impact your life—your credit history. A Credit Report is a record of your financial actions, and it is also a record of your life and the places you’ve lived.

Most major life events–whether positive or negative—affect your Credit Report and Scores, some more than others. The following major life events can have a profound impact on your credit:

Marriage: Marriage opens up financial opportunities because you can pool your money, but it also brings on new responsibilities that can affect your personal credit and your Credit Report.

Consider the following:

• Name change: If you change your name, you should notify both your creditors and the Credit Bureaus.
• Joint credit: Even if you plan to join financial forces with your new spouse, it’s a good idea for both of you to keep individual credit in your own names.

Divorce: If you are in the midst of a divorce, be sure to contact your creditors and Credit Bureaus in order to protect the integrity of your credit report. These agencies will record your new contact information. Also, if your ex-spouse is disgruntled, secure your mail so he/she cannot steal items such as approved credit card applications. It’s also a good idea to speak with an attorney about closing joint accounts and paying off balances in the event of a divorce.

Buying a home: The purchase of a home, particularly if you are a first-time home buyer, affects your Credit Report both positively and negatively. For one, it helps you build equity and adds to your net worth. On the other hand, a mortgage is a huge loan that substantially increases the amount of debt on your Credit Report; however, if paid as agreed, it is actually good for your report.

Having a baby: With children come significant financial demands, and therefore, new demands on your credit. Your expenses will increase after you have a child, and you will have to start using your credit wisely in order to plan for college in 18 years.

Death of a spouse: If you share joint accounts and/or a mortgage with your husband or wife, a creditor cannot change the terms of the account should you or your spouse die. Therefore, the surviving spouse becomes responsible for any debt acquired jointly.

A lost job: If you lose your job, be sure to inform your lenders and credit card companies immediately. They may be able to help you achieve reduced payments while you are in between jobs.

Remember, stuff does happen. And although you may not currently be experiencing a major life event, you are likely to face one in the future. Obtaining and reviewing a copy of your Credit Report today and subsequently strengthening your creditworthiness, if necessary, may help ease financial burdens that may arise in the future.