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How Life’s Major Events Affect Your Credit

Major changes in our lives, including marriages, divorces and the birth of children, can have a profound impact on our credit, and bring about significant financial changes. It is a good idea for every consumer to become familiar with the ways in which credit is affected by these life changing events.

Marriages and Divorces
Marriage can bring a new financial freedom for the couple, and allow them to pool their resources, but there are additional issues, and new responsibilities as well. One of the most significant changes that can affect your credit is as simple as a name change. It is important to any newly married woman to notify the credit reporting agencies about her new name, otherwise her previous credit history could be lost.

It is important as well for women to keep their credit in their own name. For example, Sally Smith should be sure her credit is listed under Sally Smith, not under Mrs. Joe Smith. It is vital for every woman to build up her own credit history, rather than simply relying on the credit history of her spouse.

It is also important to remember that joint bank accounts come with joint responsibilities. In the event of a divorce, no matter what the divorce decree says, in the eyes of your creditors, both you and your ex-spouse are responsible for the bills.

The purchase of a home
The purchase of a home, especially when it is a first time purchase, can place huge demands on one’s personal credit. The purchase of a home typically requires an excellent credit rating, and after the home sale has gone through and the mortgage is in place the credit dynamics of the buyer can change significantly. On the plus side, homeowners are building equity, and they are increasing their net worth with every mortgage payment. On the downside, a home mortgage is a significant loan, and it can greatly impact the ability to take on additional debt.

The birth or adoption of children

Starting a family places significant burdens on any couple, and credit ratings can easily be impacted by all the new things couples must buy to accommodate those new additions to the family. It is even more vital, of course, to take good care of your credit once you are responsible for a family, and it is important to keep the credit score as high as possible in anticipation of college loans and other big ticket items down the road.

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