Some financial conversations can be complicated. Wondering if there should be a mystery involved when it comes to your partner’s Credit Score? We’re here to help simplify matters for you.
A host of factors go into making a strong and lasting relationship. Fiscal compatibility is just one among the many factors. So, when do you think is the right time to ask about your significant other’s Credit Score? Well, once you’ve hit the point of considering a future together, it is necessary that you have an honest conversation about your credit behaviour and fiscal history.
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What does your partner’s poor Credit Score say about him/her?
Both you and your partner should put your overall financial picture involving your savings, credit, debt, and investments out on the table.
In the event that one of you has a less-than-glowing credit history, it will inevitably impact the other when you start applying for credit together and opening joint accounts. Here are possible red flags that you can identify from your partner’s low Credit Score.
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Sloppy financial choices
Poor commitment to the payment of bills is uncalled for, especially because automatic bill payments and electronic transfers have turned the herculean task of keeping up with your financial obligations into a mere walk in the park.
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Debt baggage
It’s not that debt is a burden that you can’t get past, but it is a worrying concern that calls for a plan of action. If your partner doesn’t comprehend the need to work through debt rationally and consistently, things are sure to take an ugly turn when it comes to future commitments.
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Poor credit history
Having the right mix of credit can boost your Credit Score. If your partner’s credit portfolio does not contain a bag of financial products, he/she may not be demonstrating the ability to think ahead. By their 30s, though, not saving for retirement is a red flag.
Your Credit Scores are your own. However, knowing your partner’s Credit Score is the first step towards addressing the elephant in the room. How to be finance savvy as a team? Besides, you may want to have a clear idea of whether the two of you can qualify for a mortgage or a Personal Loan together.
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So, now you know how these three digits offer a bird’s eye view into an individual’s ability to meet financial obligations in the future. We’re not saying that poor monetary choices make your partner an unscrupulous person.
All we are saying is, you should not be in the dark about how and why any debt or unpaid bills occurred. Once that is figured, your partner and you are all set to chalk a plan for tackling any financial obstacles as a squad.
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Your approach to building a rock solid credit history is sure to have a huge impact on the way you manage your money. Needless to say, this can get twice as complex when you add a partner into the mix.
Instead of trying to change someone, which more often than not has a success rate of zero, devise a creative solution that can motivate your partner to ramp up his/her score.
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Individual or shared? The big question!
If you’re in doubt about sharing bills with your partner, here are some of the methods you can consider. Talk it out and decide on an approach that both of you are comfortable with.
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Separate Accounts
This way, you can manage your money entirely on your own. In addition, you can set up a completely separate system for paying joint bills and expenses.
The clear advantage of this method is that your partner and you will have more control over your money.
This method comes in handy if you and your spouse have extremely varying approaches to money management.
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Joint Account
This system lets you accumulate all your money into a shared account to split all your bills and save up for shared objectives.
In case you’re headed to this route, it’s best to begin by setting some ground rules. Having a joint account definitely requires greater communication between you and your significant other.
This method of managing your money is easier for couples who want to eliminate the hassle of splitting bills and sending money to each other.
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Both Separate and Joint Accounts
As you must have guessed already, this method comes with the best of both worlds. Here, you open a joint account to pay for shared bills and common goals. Alongside, you also have separate accounts for personal expenses.
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Now that you’re aware of how to manage your finances along with your partner, figure out what works best for the two of you. Whatever method you pick, remember to establish complete transparency.
Why should your partner’s Credit Score matter to you?
If you’re wondering how you’re partner’s Credit Score affects yours, keep reading. Let’s say that a couple has applied for a Personal Loan together. The lender is sure to look at the scores of both of them. Now, even if one person’s score is above 750, their partner’s low score is enough to make them ineligible.
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It’s important that you know your partner’s Credit Score and likewise. This promotes healthy dialogue when it comes to financial compatibility. The recipe for well-informed credit behaviour as a couple lies in understanding how the individual credit behavior can affect both you and your significant other.
Pro Tip: If you haven’t checked your score in a long time, don’t worry. Get your updated Experian Credit Score for FREE!
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When talking to your partner, try to be respectful and understanding of their financial condition. Discussing such money and debt issues can be embarrassing. So, don’t forget to be supportive.
If you’re looking for any financial products such as Credit Cards or a Personal Loan, or just want to set up a Savings Account, do check us out. We’ve got all your financial needs under one roof!