Tuesday, 1 December 2015

Should one check a probable spouse’s CIBIL score before marriage?

Traditionally, the use of credit scores was restricted to financial transactions, when an individual applied for a loan or credit card. Going beyond that now, other applications include checking the CIBIL score of a prospective life partner. Sounds unbelievable? Well, people are now looking at this option – and moving beyond horoscopes! – in order to ensure their financial well-being post marriage.
Essentially, you’ll find that people can be broadly categorized as spenders, those who save and those who can manage to delicately balance both. As a result, when on the lookout for a prospective spouse, people do tend to check credit scores to ensure that they are not marrying into the extremes – someone who spends lavishly may not have adequate savings, and conversely one who is thrifty may just be so frugal that they (and their spouse) may not really enjoy life. Obviously then, you would want to marry the person who can handle their money well. Like other factors the families take into consideration before marriage, knowing a prospective spouse’s credit score makes sure you don’t walk into a marriage not knowing what the finances of the other person look like.
Consider this. Let’s say you didn’t know a person’s CIBIL score when you got married, and realized within a short span of time that not only have you married the person, but also their debt (say a credit card with a history of default). When you see a credit report, any such loans or card outstanding can be pointed out immediately, and clarification sought.
Further, let us assume that at a later date, the couple would choose to purchase a house of their own. In this case, if either (or both) has a poor or bad credit score, chances are that their loan application may be denied, or offered at less than competitive interest rates and other terms. Do keep in mind that if you marry someone with a poor score, your individual score does not get impacted, or change. But what matters is this – as in the scenario explained above, if you decide to avail of a joint loan, there may just be negative repercussions.
So will marriage per se lower your credit score? Well, no. But let’s say you spend lavishly while shopping on honeymoon, and then neglect to pay off (or delay paying) those bills, there are chances that your score could take a hit. As always, whether single or married, ensure timely payment of all outstanding dues, whether on a credit card or loan account.
If nothing else, knowing your prospective partner’s credit score will help you understand their spending habits – and how well they manage their finances. If the score is not good, you may want to be wary when applying for a joint loan. If you still must, remember that you may just be exposing yourself to huge debt in the future, and you would need to pay it off as well.
Of course, not all loans are bad to have – for example, an education loan that your prospective spouse had availed of in order to take up a post-graduate program overseas. This being a valid debt, even if you see the loan ongoing, don’t hit the panic button. Just ensure you check that the loan is being serviced well, and you probably don’t have anything to worry about.
On a related note, do keep in mind that marriage itself is not always easy. When it comes down to it, you do not want to be saddled with an existing debt just because the person you chose to marry was lax about repaying it. Further, if there is one such loan (or card) to blot the credit score, what is to say there won’t be more in the future again? Money management is something that needs to be tackled well, and sensitively between a couple, and hence knowing the score prior to going ahead with that life-changing decision may not be a bad move at all!

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