Credit Repair – Rebuilding Credit Damaged By Family Members

Money is a medium of exchange, which everyone uses to fulfil and satisfy his or her wishes and wants. How can you reproach your family members for spending it once you have given them access to it?

“People wish for money above all things. It is always ready to turn itself into whatever object their wandering wishes or their manifold desires may fix upon. Everything else can satisfy only one wish; money alone is the abstract satisfaction of every wish.” – Schopenhauer

Be it family or loved ones, maxed-out credit cards, debt and other money-related problems are reasons that come between and spoil human relationships. Prevention is always better than cure. Keep your family and partners from damaging financial relationships by taking some preventive steps.

Joint account? Avoid overdrafts

Sharing lives is one thing, sharing earnings and money is another. This is not to say you should not give or spend money on others. However, contemporary innovations in technology make it easier to share checking account, debit, credit cards, financial partnerships and paying for college or other needs. One person may easily get into the habit of expecting the other to make good on overdrafts. Banks may close accounts leading to difficulties.

Couples can use joint account for shared expenses. Using it for personal expenses without discussing it first is dipping into shared accounts unfairly. Set ground rules and stop repetitions to prevent financial friction. Online banking with text alerts help monitor balances. Couples or people sharing financial responsibilities can prevent disaster if they monitor their spending behavior.

Sharing a credit card? Protect your score

Sharing a credit card has its own risks. Bills must be paid no matter who makes the purchases. Co-signers or joint account holders are liable for this. If one or other maxes out a card limit or miss a payment, it will hurt credit scores for both. It shows up on credit reports for any one of you trying for new loan. Protecting individual scores is more important than sharing financial responsibility. You can do both with separate credit cards. Don’t share expenses, there’s nothing to manage there. It will only lead to resentments.

Sibling business partners? Proceed with caution

Business co-owners have to be careful always. This is especially true in case of siblings. It so happens that one or other shirks off onus of success more often than not instead of doing everything to contribute equally. Shared power of attorneys and joint permissions provide safety to deal with external forces. You can deal with sibling or family disputes internally better without outside intervention. Third parties will only see their selfish motives. Family members live or face each other daily and must come to terms with each other’s behavior.­

Don’t let personal problems interfere with business decisions. Costs of financing loans are high and problems drive up odds against settlements. Siblings should help each other guard their credit scores by juggling their finances effectively. This will help them maintain high scores and get best loan rates.

Helping pay for college? Know your options

Parents can act as co-signer for student loans. Parents can take out a loan to pay for their children’s college education. This is a large amount, which is going to affect finances significantly. Legal responsibility will hit credit ratings. Children with good credit and stable income can qualify for a refinance bringing down rates. If you make regular and on time monthly payments some lenders release co-signer from responsibility after certain period. Parent loans such as federal direct PLUS loan in their own name cannot be transferred in child’s name. Refinance through private lenders but you may lose federal benefits like access to income-driven repayment.

In Conclusion

Follow the above advice if you want to keep minor relationship headaches from developing into migraines. You can choose your friends but not family. You can make new friends but cannot gain or replace blood relations. If you want to keep loved ones happy, take their positive influences and give positive influences in return. Then, outside people cannot take advantage.