If you are planning to buy property with a spouse or with a partner, your combined credit histories can become an issue, particularly if one is considerably worse than the other. That's why it's important to share critical financial information before you move in or get married and to make every attempt to clean up your credit reports before you attempt to borrow for a home or investment property.

A Couple's Credit Makeover

One of the best things two people can do for each other before they move in or marry is present a clean financial slate. If one or both partners has significant student, credit card, business, mortgage, or other debt, those amounts need to be brought into the open.

Both parties need to discuss how those debts will be repaid, by whom, and by what time. Before you sit down, both of you should agree to pull your latest credit report and share it with the other.

Once two people have identified the problems that need to be solved, they need to set a solution and a timetable to do the following:

• Bring all payments current. If one partner is a late payer, he or she needs to be brought on time, even if the more conscientious partner has to take over payment of the bills.

• Clear collection issues as soon as possible. It takes seven years to remove a collection account from someone's credit record, even if it's been paid. It's important to mark the month it will be removed so you can follow up.

• Get rid of balances in sequence. Come up with a beginning-of-the-relationship plan to pay off credit card balances in a sensible order: focus on paying balances off, the highest-rate ones first. There's a temptation to move around outstanding balances if you get a good offer, but remember that applying for new credit when you have credit problems can damage your credit rating and score. Sometimes it still makes legitimate sense to do this if it cuts your borrowing cost, but make sure you don't shift balances too often.

Remember that both of your credit pictures are critical to your borrowing future.