Ever since returning from the first date with your significant other, you knew you were destined to be together forever. Right? Then one day you get over your nerves and ask the big question. No, not that question. The other question.
“What’s your credit score?”
Maybe you’ve always had good credit or you’ve nursed your credit back from the brink and now it’s so pretty you want to wear it as a lapel pin. Either way, your credit, and your financial future are important to you so naturally, you’d want to know how your partner is doing.
Your partner’s answer? Their credit is bad. And not cat person when you’re a dog person bad, but Star Wars fan when you’re a Trekkie bad.
Should you break up?
Why Credit Score Matters to Your Relationship
A credit score is a number that is designed to represent how well you manage your credit. It’s calculated using several different factors including the number and types of credit you have, whether you pay your bills on time, and the total amount of credit you have available.
Credit scores were originally created to be used by lenders making credit decisions but now they are also used in other ways. Some companies use them to make hiring decisions. Housing providers, utility companies and cell phone carriers may use them to set your rates and security deposit amounts. Even insurance companies use it.
Scores can range from 300 to 850, with 704 being average. A higher score usually leads to lower interest rates on loans or credit cards. It can be the difference from being able to access credit at all. Fortunately, it is easy to monitor your credit score online or with apps like Turbo to make sure you are in good shape.
If a credit score is so useful in determining someone’s overall trustworthiness and risk, could it also be used to evaluate potential partners?
Credit Score = Relationship Score?
It can be hard to pinpoint any one thing that determines what makes a good partner or a lasting relationship, but disagreements over finances are one of the top reasons why people say they end relationships. So can a credit score be used as a relationship score? As it turns out it sort of can, but there are also very good reasons why you shouldn’t.
According to a 2015 Federal Reserve study, people with higher credit scores are more likely to be in relationships and those relationships are more likely to last longer. The study also found that people tend to end up in long-term relationships with people that have scores that are similar to their own.
What’s more, it found that a couple with very different credit scores (66+ points) is 24% more likely to break up even for reasons that have nothing to do with credit or finances. The biggest shocker is that the study concluded that credit scores are indicative of trustworthiness in general.
Credit Scores Are Only One Part of the Romance Equation
Although the findings sound ominous, differences in credit scores and low credit scores are getting a bad rep here. It’s important to note that studies cannot predict or determine if your specific relationship can thrive despite an initial credit score mismatch. A low credit score or a big difference in scores does not mean that your relationship is doomed or that you should run from your partner’s low credit score like it’s the plague.
There are many reasons for a low credit score, some of which have nothing to do with your partner’s ability to handle credit or their trustworthiness. When people are young, their credit histories are short and they usually do not make as much money to so they don’t have the high credit limits that can boost scores. Your partner may have opted to avoid credit altogether and sticks to cash. They may have thought they were doing the responsible thing and didn’t know that it would limit their ability to build a strong credit score.
Even if your partner did have credit hiccups in the past, missing a payment here or there does not necessarily mean that your partner is untrustworthy, forgetful, or devious. It can be all too easy to get caught up in something new and exciting (like a new relationship) and not feel like checking the mail. That credit card bill from that clothing store that you opened on a whim to get a discount (and that ballin shirt) may be overlooked and ding you or your partner’s credit.
A good credit score will take years to build up and even a single missed payment can have a huge impact. So even if your partner is 100% responsible now, those missed payments might still be impacting their credit scores for another few years.
Frequently moving can also cause some credit issues if bills are not forwarded on time or at all to the new address. It is very common to move quite a bit, especially when we are young. Speaking from personal experience, it is too easy to miss a payment from something like this. Tracking your finances online through Mint.com can help prevent that by letting you know when all your bills due with a single login.
What Does Your Credit Score Gap Mean for Your Relationship?
Look beyond those three little numbers because of the why matters. Take some time to have #RealMoneyTalks with your partner to discover why their credit is in the dumps and what they are doing now to fix it. Hopefully, they have been making moves to improve their score over time. If they haven’t, it’s worth finding out why not before making drastic decisions.
One warning: if you find that you are more interested in helping your partner up their credit score game than they are, proceed with caution. Ideally, they will actually want to improve on their own first. It may also be dangerous to your own credit score and financial well being to co-sign for or merge finances with someone who has a troubled financial past. Remember, you’re working as a team!
It is perfectly normal nowadays to care about your partner’s credit score. Use your credit scores as the jumping off point to your money conversations and figure out the best way to approach your finances as a couple. Getting comfortable tackling these tough money matters early on and doing things like creating a budget, setting individual spending limits, and tracking your credit scores will get you and your partner on the path to happily ever after in no time.
Credit scores can be really helpful to couples and used as a tool make sure that you’re both on the same page financially. While you are probably talking about goals, the future, kids, and why dogs are better than cats, you may not be talking about credit scores or money management. You should.
The research is telling us that the more couples work together, the more likely it is that their relationship will last. So approach your finances as a team.
Remember, couples that finance together stay together–well, at least more often than those that don’t.