A partner’s debt can have destructive effects on a marriage. It can derail your plans to purchase a home together, or reroute your savings from travel plans and retirement goals to interest payments.
That’s why it’s so important to know your husband’s or wife’s full credit picture. But what if your partner is hiding a secret card or loan?
Read on for how you can (legally) keep tabs on your partner’s credit and spot red flags that they’re hiding something.
Understand that secret debt takes many forms
“Secret debt” may conjure images of torrid affairs and elaborate cover-up schemes.
“To be honest, if someone is really malicious and crafty, it’s unfortunately next to impossible to tell [if they have secret debt], especially if they cover their tracks well,” says Elle Martinez, founder of the Couple Money website and podcast.
However, not all secret debt has deliberately harmful intentions.
“Some people may be supplementing income with credit, others splurging on things that don’t fit in the budget, and others may have [secret cards] only for emergencies,” says Jenna Boerger, an NFCC-certified financial professional with The Village Family Service Center, a financial counselling organization with offices in Minnesota and North Dakota. Some may even have debt from before they met their partner and “don’t want to feel judged by or burden their future spouse with their debt,” Boerger adds.
Sometimes, secret debt can be a complete accident – you signed up for a 0 percent interest offer (as Martinez did for her husband’s wedding band), forget to pay off the trailing interest after making the final payment and forget about the account entirely.
Whatever the reason, it can be hard for some people to confess their screw-up, leading to long-term hidden debt.
“Most times I’ve talked to couples about this, they’re not trying to hurt their spouse,” Martinez says. “They just messed up, they don’t want to admit it to their spouse, and it snowballs.”
Agree on level of financial transparency
There’s only so much you can do when it comes to unearthing a spouse’s secret (or accidentally forgotten) debt, as you can’t pull their credit reports or demand account information from their bank.
“You can’t really ‘keep tabs’ on someone else’s credit without their consent,” Boerger says.
What you can do, Martinez says, is agree on a level of financial transparency. She and her husband jointly hold almost all their accounts (with the exception of one account each, which they use to buy gifts for each other). They also have monthly financial reviews and regularly show each other their credit reports.
Every couple is different, though, says Martinez, so find a method that works for your relationship.
Red flag alert: If your spouse becomes defensive when you bring up financial transparency, it could be a sign they’re hiding something.
If they become overly wary, remind them of your joint goals, Martinez suggests.
“You could say, ‘I want both of us to be successful,'” she says. “And, that might get them to open up.”
Regularly review each other’s credit reports
You can’t legally view your spouse’s credit reports without their permission. But couples can (and should) make a point to sit down together, pull up their reports online and go over them.
“Typically, this is to ensure there is no inaccurate information on the report and no fraud taking place,” Boerger says. “But it could also be used to make sure everyone has a complete picture of the household’s finances.”
You get one free report from each of the three bureaus (TransUnion, Equifax, Experian) every year, and Martinez recommends checking one bureau every four months to spread them out. That way you don’t have a year-long gap, during which damage from unknown accounts can flourish.
Red flag alert: If your spouse refuses to reveal his or her credit reports, something’s probably up. While it may be understandable that your partner would want to keep specific transactions a secret (when buying your holiday presents, for example), credit reports show only open accounts, payment history and balances.
“I can’t think of any good reason why you wouldn’t share that when you’re married,” Martinez says.
If your spouse is simply nervous, offer to take the plunge first.
“You could say, ‘Let’s both pull our reports. I’ll go, then you go,'” Martinez says.
Watch the mail
This doesn’t mean opening your partner’s mail if they’re not comfortable with that. For some married couples, personal mail is a private matter, and that’s understandable, Martinez says.
But scan the envelopes.
“If there’s anything from a financial institution, an insurance company, anything you don’t recognize addressed only to your spouse, make a note of it,” Martinez says.
Don’t jump to conclusions about promotional offers for new cards – practically everyone gets those. But ask your spouse about envelopes that look like they could be account statements or bills if you don’t recognize the provider.
Red flag alert: Even if your spouse isn’t comfortable with you opening their mail, they should at least be willing to tell you what’s in the envelopes if you ask.
“You could say, ‘I noticed you’ve been getting mail from Capital One every month, and it doesn’t look like just a credit card offer,'” Martinez says.
Watch your partner’s reaction. If they refuse to give you answers – or accuse you of being overly suspicious, you might be on to their secret debt.
“There are boundaries, and those are going to be different for every couple,” Martinez says. “But a spouse should never feel bad about asking,” says Martinez.
Don’t let one person handle all money matters
Boerger has noticed the following scenario often leads to secret debt:
“One spouse may handle all the household finances, and they’re living outside their means,” she says. “At times, the spouse in control of the finances may be supplementing income with credit.”
The solution? Make sure both parties participate in household finances. If you had a hand in making the family budget, it’s easier to tell if your spouse has a card on the side.
“You know your household income and expenses,” Boerger says. “If you run the numbers and you’re spending more than you are bringing in as a household, that money is coming from somewhere. Either you are depleting your savings or charging up a credit card.”
It might make sense in your marriage for one spouse to be the financial point person, Martinez says. However, the other person should stay in the loop.
“I’m a big believer that, even if one person does the day-to-day money management, both people need to know where you are,” says Martinez.
There are plenty of ways to accomplish that, even if one spouse wants a more passive role, Martinez says. You might set up alerts from your bank (so the hands-off spouse still stays apprised of account balances, withdrawals and transactions). Or, you might use a service like Mint and link all your accounts so that both parties can keep tabs any time.
So you found secret debt. Now what?
Rebounding from hidden debt can be difficult for couples because it combines financial issues (the money owed) with emotional ones (feelings of betrayal). For that reason, both Martinez and Boerger recommend considering financial and/or couples counseling from a qualified professional.
“It’s good to have a third-party objective voice to help you get to the root of the issue,” Martinez says.
Whether you get outside help or not, make sure your response is solution-focused.
“There’s a tendency to focus on the debt accumulation and try to point the finger at one person, but that isn’t helping the debt get paid off,” Boerger says. “Acknowledge the problem, work to adjust the behaviors that led to it and focus on your efforts to pay it off as a team.”