I am getting married in a few months and my girlfriend has alot of Credit Card and Student loan debt. To the tune of about $35000 in CC and $65000 in SL debt. She has never been lat with a payment and has great credit. Fico Scores are around 728 on all 3. Is this going to affect my credit at all. My scores are around 665 and have very little debt. Also could i ever become responsible for any of her old debt for any reason.... and lastly How bad will this affect getting a mortgage. We both have decent incomes and her student loan payment is locked at $450 / month for life. and $750 / month is paid to her CC by her company. Im actually sick over this and am not sure how this will affect me.
This is her premarital debt. You won't be responsible for it, and it should never show up on your credit unless you become an AU or joint holder of any of her cards. As far as a mortgage goes - its not how much you owe, its debt to income ratio, that is what percentage of your monthly income goes to maintaining debt. Is the $750 paid by her company in writing? Is she charging $750 and they are reimbursing? A good broker would need those details. From what you've written, you may not have anything to be sick about. Your biggest concern would be long term. If one of you gets sick or hurt, can you manage both sets of debts on one income, or is one of you going to go straight to credit hell at the expense of the other?
To expand a bit on JLynns comments, getting a solid grasp on the time involved in paying these debts is important. If her student loans are 3%, I calculate about 15 years at 450 monthly. Her CC debt is harder to estimate, but if it's 12% (avg), it would take about 5-6 years to pay off. I would make sure you've got some short term disability insurance to make sure you're covered - she's carrying about 15k annually for 6 years and 5.5k annually for another 9 years. To her credit, she's kept up and has built up credit - and will continue to do so. It is a lot of debt and it's a fair amount of time, and it's becoming much more common. (student loans) Your debt ratio will fall when that CC debt is cleared, so that may be the best time to get a mortgage. Or perhaps, a bigger mortgage and for now, you get a smaller, affordable place.
At $450 a month on $65,000, even if no interest is accrued, it will take over 12 years to pay. Ouch. Don't forget that "her" debt will become YOUR debt as well when the wedding ring goes on. Maybe not actually on your credit report but it will be included in your household debt. "Yours" as in hers and your money will be used to pay your bills and if she is using her money to pay her credit cards, student loans, that takes away her money to help pay both of your other bills. Let me ask you a serious question? If before you even had your first date, I told you there is this beautiful woman who I think could be your wife. However she will bring $90,000 of debt to the marriage should it come to marriage. Do you still want to take that first date? Now you're stuck because you've found your life mate but she's bringing an enormous (depending on your incomes) amount of debt to the table. Love or money? Of course if you guys are making good money then what's $90,000 of debt? I'm not trying to be anything but devil's advocate here. Just giving you some things to think about. I believe that I would probably say to myself, "we'll cross that money bridge when we come to it; for now, I love that woman and we'll get through whateve comes our way." But that's just me. Good luck.....and congratulations on your engagement.
Re: Re: Marrying into debt. Broncsboi... good thing this poor girl didn't fall in love with you!!! lol I married into debt also. It does not report on my credit reports at all, other than listing him as my spouse on Experian....he does not affect my scores. It sounds like she has been responsible in handling her credit to date, and will most likely continue to do so. If you don't have debt, then since you are taking her as your life partner, you can help pay off her debt that much sooner. Snowball it. Don't let her debt make you sick, that sounds awful! She's obviously obtained the education she's paying for and taking care of herself. Be happy you have an educated, responsible woman to love you. NuB
Re: Re: Marrying into debt. For richer or poorer, prime or sub-prime, zero percent or twenty nine percent... Every relationship has its tradeoffs. In this case, it's something you can both work towards changing. Not a bad deal as these things go...
Re: Re: Marrying into debt. Thank you for all of your help. I just don't want to carry this burden for the rest of my life, and god forbid something happens to her or the relationship doesn't work out. I don't want to have to sell the house to payfoff the SL's. well on a good note she does pay on time. (fighting back my tears). Another question ....Hypothetically speaking ...My biggest credit problem is that I do not have any history (it mysteriously disappeared) My scores are around 660 - 720 but I still cannot get a credit card as I only have $300 revolving credit. BTW I just got my AMEX green and a Target with a $200 limit which sounds really low to me. Would it be a bad thing to add myself to one of her cards that has a low balance. Or is that a potential problem?
Re: Re: Marrying into debt. If you're really concerned about being stuck with her debt in case you break up (after all, half of all marriages end in divorce), you could always consider a prenup. Something that states "what's your's is your's and what's mine is mine...including debt". This may give you some peace of mind. Of course, I don't know how your fiance may feel about it, but prenups cut both ways, too. If she makes a lot more money than you and you split up and you have a prenup, well then you're just stuck with whatever you have in your name. BTW, I've been married 15 years, and neither one of us had a nickel to our names when we met, and I've got the credit scores to prove it (mid-500's). A wise man once said "romance without finance is ignorance". You're wise to be thinking ahead.
Re: Re: Marrying into debt. and her student loan payment is locked at $450 / month for life. Evilherman ==================== http://www.justsaywow.com/newfun4/mooyear.cfm .. What if she lives to be a 100?
