Finances may be the least sexy part of a romantic relationship. But itโs one of the most important, and no one accepts a marriage proposal with the words, โYes! I canโt wait to have a joint checking account with you.โ Nor do college sweethearts usually review their student loan debts while strolling campus, hand in hand.
Among many other things, couples should make time to discuss personal finance โ the earlier, the better. Couples with a greater disparity in their credit scores are more likely to break up, according to preliminary results of a study by Federal Reserve Board researchers.
The draft of the paper, called โHousehold Formation, Credit, and Trustworthinessโ analyzes the individual and household credit scores of about 35,000 married and cohabitating couples from 1999 through 2012. It outlined credit score match quality, or the difference in partnersโ credit scores at the time they move in together, and the researchers found that credit score match quality is a strong indicator of whether or not the household remains intact.
Though the researchers will further explore the data and their conclusions in a future draft, they said the relationship between credit score match quality and household breakups is โquite strong.โ
Bridging the Credit Score Gap
Itโs not that people should bring copies of their annual credit reports on dates, but as a relationship gets more serious, the depth of financial conversations should also grow.
A good first step โ does your partner know what a credit score is? Before you can get into someone elseโs finances, take stock of your own with Credit.comโs free Credit Report Card. Once you see where you stand, itโs time to see how you and your significant otherโs credit histories match.
But a huge credit score gap isnโt a death sentence for your relationship. (On the other hand, if youโre looking for a reason to end it, youโre welcome.) While the study says those with a like-minded approach to money management are more likely to stay together, there are ways to build credit so the disparity isnโt as large.
If there are large differences to overcome, seeking outside advice might be a good idea, especially if one spouse isnโt thrilled about role-playing as a financial counselor.
Image: Zoonar
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