Your partner’s credit score reveals red flags unrelated to money

Love & Money is a MarketWatch series that examines the impact our relationship with money has on our relationships with loved ones, friends and family.

Many new couples inquire about the age of a potential partner or how many previous partners they have had. Others are more interested in another number.

About 42% of adults say that knowing someone’s credit rating would affect their willingness to date that person, according to a recent survey through the personal finance site Bankrate.com. This is up from almost 40% last year. Women were almost three times more likely to view credit score as a major influence on a potential partner than men (20% vs. 7%). Young daters aren’t as concerned about these three numbers: 45% of older millennials, defined here as those aged 27 to 36, said they care about these three numbers.

Credit scores reveal an individual’s interpersonal skills, level of commitment and reliability.

This can be useful for people using dating sites like Tinder, Bumble, OKCupid IAC,
+ 3.38%
and Match.com. A high credit score can help predict whether someone is trustworthy. Similar credit scores are “highly predictive” of whether couples stay together, according to another 2015 article by researchers at UCLA, the Brookings Institution and the Federal Reserve Board, Washington, DC. initials and the quality of the match predict subsequent use of credit and financial distress, which in turn correlates with relationship breakdown, ”they wrote. “Credit scores reveal an individual’s relationship skills and level of commitment. “

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“Previous studies have documented the various traits by which individuals organize themselves into committed relationships, including race, educational level and earning capacity, parental wealth, social caste, and physical appearance,” they wrote. “Credit scores are arguably the most important characteristics used by lenders at the individual level to secure credit. These three numbers therefore help to give singles an overview of a person’s ability to meet their future financial (and family) obligations.

By showing an interest in these three numbers, people are probably smarter than superficial, says Jeffrey Hall, associate professor of communications at the University of Kansas. “Finances, education and job prospects are all factors in a potential partner’s worth,” he says. “Assuming that people can actually interpret a credit score in a meaningful way, it makes sense that they think a credit score is useful in assessing a partner’s worth.”

Low credit scores can prevent a person from accessing a mortgage and increase the cost of loans by thousands of dollars.

What people do and say at the start of the meeting can have an impact later. After all, people combine their finances when they get married, which can impact their future happiness. In fact, the higher your credit score, the less likely you are to separate from your partner – and a lower score often means you will be less fortunate in love. More than half of Americans (58%) said they would not marry someone with significant debt, according to a study published in March 2017 of more than 2,300 adults from the legal industry site Avvo.

While knowing a person’s credit rating does not necessarily reveal whether that person has medical or student debt or even their annual income, it does indicate whether they are eligible for a loan. A bank will look at each person’s average scores – from the three major credit bureaus, Experian, Equifax, and TransUnion – then take a couple’s average score to determine their overall creditworthiness. And a low credit score does not necessarily mean that you are irresponsible with the money or even that you have no money. Credit scoring models look at how much a consumer owes against the total amount of available credit, known as the credit “utilization ratio.”

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Low credit scores can prevent access to a mortgage or increase credit costs by several thousand dollars, says Stephen Brobeck, executive director of the Consumer Federation of America, a consumer advocacy group. Credit scores are likely to increase the finance costs of a $ 20,000 60-month auto loan by over $ 5,000.

For those who want to talk about it at a candlelight dinner, they should know what it means. A score between 661 and 780 is considered good credit and between 781 and 850 is considered excellent credit, according to the financial site Credit.com. The site rates fair credit between 601 and 660, bad credit between 501 and 600, and bad credit as less than 500.

Previous research suggests that women are more concerned with their potential partner’s earning capacity than men.

But different lenders may have different criteria when it comes to lending money, and may approve borrowers with a credit score below 700. A high score actually means that their potential date has paid their bills out. time, or only uses a small percentage. of their available credit on credit cards.

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Still, those millennials in the Bankrate study might be too quick to judge. This age group also has the lowest credit scores of any generation of Americans, a separate report released by the Experian credit bureau found. The report, based on anonymous data from Experian’s consumer credit database, found that millennials have an average credit score of 625 on an average debt of $ 52,120.

In comparison, Generation X (aged 35 to 49) has a credit score of 650 on an average debt of $ 125,000, while Baby Boomers and the larger generation (with a combined age between 50 and 87 years) have a credit score of 709 on average debt. of $ 87,438. Credit scores, experts say, are based on experience and millennials have plenty of time to improve their numbers.

Previous research also supports the proposition that women are more concerned with the earning capacity of their potential partner than men. “Too many women are still too focused on the possessions of their romantic partner. In their minds, money is power and women want powerful men, ”says Fran Walfish, psychotherapist based in Beverly Hills, California. “Money comes and goes, and you’re always face to face.”

Walfish says the rich, famous and privileged flock to his office with the same ailments and issues that ordinary people do, including communication, sexual issues, parenting and, most importantly, conflict resolution skills. Financial responsibility runs through most of these issues and can be a test of how willing people are to work together as a team to build a future. “The goal for each person is to grow as a complete, whole and autonomous individual,” she says.

(This story was updated on July 22, 2019.)

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