When it comes to the strength and success of a relationship, there are a lot of different factors at work, from romantic compatibility and common interests to being in the right place at the right time. Another factor you may not have considered that can actually have a huge impact on whether your love will last? Your credit score. Those three little numbers impact way more than your ability to get a mortgage, so we turned to the experts to get the scoop.
Like any money conversation, talking about your credit score can be a hard thing for you and your partner to do, but sharing your financial situation is the first step in preventing major issues (both romantically and financially) down the road. “If you are in a serious relationship, it is important to have a discussion about your finances,” says Mike Cetera, credit analyst for Bankrate.com. “It shouldn’t be a confrontation, especially if you suspect your partner has weaker credit than you do. Instead, start a more lighthearted conversation about money in general. Something like, ‘My friend’s boyfriend is having a hard time keeping up with his bills. Not being able to pay on time really scares me, what do you think?’ will get you started without accusing anyone of anything.” You’ll start to get a sense of your partner’s money philosophy, as well as feel comfortable sharing your own experiences. “You shouldn’t move in with or marry someone without having a solid understanding of both their debts and their spending habits,” Cetera stresses.
And what happens if your credit score is low? “Difficulty getting a mortgage is often highlighted as the biggest impact of bad credit, but the reach goes much farther,” says Cetera. “Landlords frequently check credit before approving a lease, so you may not even be able to rent a home. And if your credit is bad, your utility companies may require that you put down a security deposit.” Prospective employers can ask to check your credit history (meaning bad credit could lose you that job you really want), you may be stuck paying a higher insurance premium, and any loan—from homes and cars to credit cards—will be tough to get with a low credit score.
Of course, if your partner has bad credit you can put most of these things in your own name, but that means you’ll be the only one legally responsible for making payments—which means you’re the only one taking on the risk.
If those three numbers are lower than you want them to be, thankfully Cetera has a few tips for helping to improve your credit score. “First, always pay your bills on time. Your payment history accounts for 35 percent of your credit score, so if you pay bills late (or not at all), your score will be greatly reduced,” Cetera explains. “Second, be careful about how much you owe. The amount of debt you have accounts for 30 percent of your score. A lot of debt doesn’t always mean you’ll have a low score, but it’s important to strike a balance between how much credit you have available and how much you use. Maxing out a $5,000 credit card limit will give you a much lower score than someone who owes $5,000 but has a $20,000 credit limit.
No discussion about finances in a relationship would be complete without talking about joining bank accounts. “Your traditional credit scores will not be affected if you and your partner open a joint account, as your credit score is focused only on your access to credit, payment history, and debt. However, if you and your partner decide not to have a joint account, make sure to still have a thorough discussion about your financial history and spending habits, as if your partner has a bad credit score or is secretive with money, it’s a big red flag,” says Cetera.