Stay-at-Home Military Spouses and Credit

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Even when they come electronically, it's important to look over your bills each month.

A military spouse, like his or her significant other, must be largely self-sufficient and ready for anything. Whether it's learning of a short-notice deployment or being stop-lossed, the show must always go on at home. 

As we all know, your credit standing is very important given that it not only affects your credit card and loan rates, but also your insurance premiums, job prospects, and even your ability to rent an apartment or lease a car. It's easy to feel secure if your significant other has a strong credit score, but being prepared for anything means you have to consider what would happen in the unfortunate event of divorce or death.

In the face of such a disaster, would you really want the added pressure of basically starting over from scratch financially – going from never having your financial responsibility questioned to having to prove you're trustworthy? Of course not, which is why it is important for your personal credit standing to be strong.

To build and maintain a solid credit score, you'll need a loan, line of credit, or credit card reporting positive information to the major credit bureaus on a monthly basis. Credit cards are obviously the most attainable of these options, and they don't require you to incur any debt in order to reap credit building benefits given that account information will be relayed to the credit bureaus on a monthly basis even if you have a $0 balance.

Luckily for stay-at-home spouses who don't have the individual income to meet application requirements, a rule from the Consumer Financial Protection Bureau (CFPB) allows banks to consider household income, not just individual earnings, when processing a new credit card application. 

You and your significant other can also apply for a joint credit card account. Many banks offer such accounts, which require both parties to provide their Social Security Numbers and financial information when applying. If approved, both parties will then be liable for any debt incurred, and usage information will be reflected in both of their credit files. Keep in mind that this is different from being an authorized user, which provides some credit building benefits, but not anything like being a primary account holder.

If you decide to go this route, just make sure to set up automatic payments from a joint checking account or clearly establish whose responsibility it is to ensure that payments are made on time each month. You wouldn't want a lack of communication to damage your credit. Similarly, if you're concerned about overspending, you can apply jointly for a secured credit card account. Secured cards require that you place a refundable security deposit that acts as your credit line, ensuring that you cannot spend more than you can afford to pay back and that the credit card company will get repaid.

It's also important to note that if you are unable to apply for a joint credit card account for some reason your assets could enable you to qualify individually. Credit card underwriting rules technically dictate that you must display either the independent income or assets to make monthly minimum credit card payments, which can be as low as $15. Therefore, even if you don't have a steady cash flow, your own possessions could serve as collateral, making issuers comfortable extending you credit.

 

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