More and more people today are becoming aware of the role personal finances play in overall relationship satisfaction. A survey found that 42% of Americans viewed one’s credit score as a key factor to consider before dating someone.
A credit score is a three-digit number that reflects a person’s creditworthiness and is based on credit history. A high credit score means you’re a low-risk borrower, while a low credit score could mean you may have trouble getting approved for a loan or mortgage.
While everyone needs to be aware of their credit score, couples need to be on the same page when it comes to financial matters. Here are five reasons why you should know your partner’s credit score:
Signals Financial Responsibility and Stability
A good credit score signals to potential lenders that you are a responsible borrower and are likely to repay your debts.
In a partner, a good credit score means they are financially healthy. This is a valuable trait to have in any relationship, but especially if you are considering taking out a loan or mortgage together.
Those same skills will likely carry over into other areas of their life, such as being responsible for rent, bills, and other monthly expenses. Knowing for a fact that your partner is financially responsible can help reduce your overall stress level and give you peace of mind.
A good credit score also signals stability. Lenders like to see that you have been borrowing money and repaying it successfully. This indicates that you are likely to continue doing so in the future.
It may also make it easier for your partner to get a job if their credit score is good. Many employers now do a credit check as part of the hiring process.
If your partner’s credit score is poor, it could indicate that they are in debt or have difficulty managing their money. This could be a sign of future financial problems for the two of you. It won’t mean you have to break up but you do have to prepare for some potential money problems down the road.
Their Credit Score Can Affect Yours
When you’re in a relationship, it’s not just your financial history that can impact your credit score – your partner’s history can play a role as well.
If you apply for a joint credit card or loan, the lender will look at both of your credit scores to determine your eligibility and interest rate. And if you cosign on a loan for your partner, you’re both equally responsible for repaying the debt, and any late payments will show up on your credit report.
Also, if you move in together and open joint accounts, such as utility bills or a cable subscription, those bills will become part of your shared payment history. So if your partner has a history of making late payments, it could damage your credit score as well.
Helps with Plans, Both Short- and Long-Term
Couples who have a good understanding of each other’s credit scores can plan better, both in the short and long run. Knowing where you and your partner stand financially can help avoid any surprises later on.
For example, if one partner has a low credit score, the other might be able to work out a plan to help improve it before any big purchases or loans. You can also keep each other accountable by setting goals and working towards them together.
Asking for your partner’s credit score can be awkward for some couples but if you have nothing to hide, it can be a great way to start building that trust.
Reduces Financial Tension
Credit scores can sometimes be a source of tension in a relationship. But, if you know what your partner’s score is, it can help to relieve stress from both parties.
For instance, if your partner has a low credit score, asking them to disclose this information to you may be difficult. However, it’s important to remember that everyone makes mistakes and has areas where they can improve. If your partner is willing to work on their credit score with you, it will show that they are committed to making your relationship work.
Money issues and debts are one of the most common reasons for divorce. Learning to talk about financial matters openly and without judgment helps reduce the chances of this happening in your relationship.
Knowing your partner’s credit score is not only important in case of an emergency but it also has practical benefits you may not have considered.
More financial products are available to you—as well as friendlier interest rates—if you’ve proven yourself to be a low-risk borrower. This can help you carve out extra savings and afford bigger purchases down the line.
By knowing which one has the better credit score, a married couple can work together to get the most advantageous interest rates on things like car loans, mortgages, and credit cards. For example, if you have a good credit score and your partner doesn’t, you might be able to help them get approved for a loan or line of credit that they wouldn’t have qualified for on their own. This can be a great way to help your partner build their credit score over time.
These and other reasons make it important for couples to have a frank discussion about their credit scores and work together to improve them if necessary. Having this knowledge gives you the power to make informed decisions about your financial future, both as individuals and as a couple.
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