She May Rate Highly as a Spouse, but How About as a Credit Risk?

Q. I have been dating a woman for about 10 years, and we are now contemplating a marital commitment. I have taken steps to clean up my credit and save some money, and may be in a position to buy a house within a few years. Her credit, however, is in terrible shape. Creditors call her constantly, and her credit report is undoubtedly a nightmare. Can you please discuss some of the options available and what will lie ahead for us if we get married?

A. I was about to tease you about rushing into marriage until I read the rest of your letter. Your caution is understandable.

This is a woman who apparently can’t handle the simple adult responsibility of paying her bills on time. You didn’t mention a catastrophic event such as a layoff, illness or injury that could account for her problems. Even if she has suffered such a setback, however, she should be working with her creditors to arrange a payback plan--not dodging their calls.

What’s more likely is that she can’t delay gratification. She buys things she can’t afford, instead of planning and saving for what she really wants. If you get married, she’ll have the opportunity to trash two financial lives rather than just her own. Although it is theoretically possible to keep completely separate credit reports, it just isn’t feasible in the real world. The two of you will share responsibility for both your credit ratings till death do you part, or until you get tired of cleaning up after her money messes and file for divorce.

If she’s willing to grow up and face her problems, then she can do a lot. Robin Leonard’s book “Money Troubles” (Nolo Press) should be her bible for this process.

Your amore will need to get a copy of her credit report so she can identify everyone who needs to be paid (and so she can challenge any inaccurate information). She’ll have to stop using credit cards, pay off all those creditors and stay current on all her bills. Establishing a new history of paying her bills on time can do a lot to offset sins of the past. If she can’t work out a payment plan with her creditors, the Consumer Credit Counseling Service in your area may be able to intervene for her.

You can help her with all this, and give her the support to get through the process. Many financial basket cases keep putting off doing something about their situations because they fear the unknown. Having a plan to deal with the problem can do a lot to calm that fear, but your fiancee still needs the courage and the willingness to start. Otherwise, your marriage could be as nightmarish as that credit report.

Don’t Burden Yourself

Q. Can I use a Visa credit card to pay federal taxes owed for 1998? So far I have heard only Discover, American Express and MasterCard can be used.

A. No, you can’t use your Visa. But be grateful.

Congress ordered the IRS to start accepting credit cards for taxpayers’ convenience, but you pay for the privilege. The company that’s processing these payments for the IRS, U.S. Audiotex, charges you a fee of about 3% of the tax due. Add that to the interest rate you’re paying on your card, and you could wind up paying 1998’s tax bill well into the new millennium. Buck up and write Uncle Sam a check.

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Liz Pulliam is a personal finance writer for The Times and a graduate of the certified financial planner training program at UC Irvine. She will answer questions submitted--or inspired--by readers on a variety of financial issues in this column. She regrets that she cannot respond personally to queries. Questions can be sent to her at liz.pulliam@latimes.com or mailed to her in care of Money Talk, Business Section, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053.