Why you should check your credit score before the wedding

Relationship experts stress that personal finances are the most challenging part of any relationship. If you’re just starting out together, and are entering the marriage with student loan debt or low credit scores, then you need to sit down with your fiancée and formulate a plan.

Sometimes it is easy to get carried away with the wedding, and letting costs spiral out of control is in nobody’s best interest, especially if you plan on buying a house someday. Your credit score might take a hit if your partner is still paying off their student loans, and if they are late on payments, it could impact your financial future together, so here are some tips to using student loan debt as a tool to improve your credit score.

Most people have it in their head that if they pay off their student loan as soon as they can this will benefit their credit score, but this is simply not true. When dealing with any loan, in this case a student loan, there is a middle ground between paying it off too quickly and rarely paying towards it. This is because, while banks want to see their money back quickly, the longer you take to repay it, the more money they make because of interest. This means that once you start to pay back your loan you should do so fairly quickly, but not all at once.

How will you know how much to repay? Well when you or your fiancée took out your student loan, or whatever loan it may be, you should have been advised upon a repayment plan and it really is a good idea to stick to it slightly.

Most financial professionals would recommend that you pay it back slightly faster than the repayment plan schedule as this impresses anyone looking into your credit report, but the most important thing is that you never pay it back slower than your advised plan.

This way anyone who looks into your credit will see that you have, in the past, taken out a debt, but you have paid it back and never missed a payment.

What can newlyweds do to manage debt?
The most important step starts before you or your new spouse even take out your student loan. According to Federal Student Aid, if you’re applying for a private student loan, your rate will depend on your credit score. You need to make the amount you borrow as small as possible and minimize your debt.

You can do this by making yourself a savings plan to save a certain amount or you can look for alternate loans, like your parents or other family members. This means that you are significantly reducing the amount of money you need to repay, which lowers your risk as loan recipient.

If you’re still in college or grad school, you can begin to pay off your debt the moment you receive the money and a great way to do this is get a part-time job, or some sort of small income just to ease of the pressure ever-so-slightly.

Although you may want to get a job to jump-the-gun on your repayments, according to one person we talked to at Ovation Credit Services, a company that helps people improve their credit score, “It is incredibly important to remain focused on your studies because otherwise your loan is pointless and you could have just skipped university.”

Once you or your fiancée has graduated, and hopefully followed our first two recommendations, you will enter the “grace period”, which is a few month that your loaner will usually give you to search for a good job before re-paying your debt.

What if one of us misses a payment?
With student loans, just like any other loan, it is essential that you always keep ahead of the game, otherwise you can end up with a bad rating. That is why we cannot stress enough how important it is that new couples try and do the three steps we mentioned above as they can really help you out in the long-run. Missing a payment or two will damage your credit rating, but it is not impossible to come back and there are many handy guides on the internet on how to rescue your score. We hope this short guide will help you start out your new life together with a solid financial plan.

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