Valentine's Day is long gone but Cupid is still in business, drawing back his bow for a shot at true love for fortunate couples.
Yet many relationships can't take flight until both parties have a candid discussion about money. More specifically, that conversation should prioritize potentially troubling credit situations that can capsize a relationship before it gets rolling.
Why Talk About Money and Credit?
Yes, people can have bad credit for a variety of reasons, fair and unfair, but a romantic partner with strong credit health has a right to know if his or her significant other has credit problems.
In fact, there's a strong case that credit health should be a big factor in evaluating a romantic partner. According to data from Experian, half of Americans say that credit scores are "important" when choosing a spouse.
Yet credit scores are at the top of the list of financial topics "not discussed" before two romantic partners agree to tie the knot.
Millennials ❤️ Love Good Money Managers
Millennials seem to be getting the message. A separate study from Affirm, an online consumer loan services company, states that 53% of millennial respondents considered whether their partner was good at managing money before dating exclusively, more than any other generation.
That's where a frank (and careful) conversation about money and credit can clear the air, and let each partner know where he or stands on potential household financial issues. A good face-to-face talk is also preferable to picking up signs and cues that your love interest has financial problems—but isn't admitting to them.
"Many of the financial values of the person you want to date will ‘spill out' into regular conversations and behaviors," says Jonathan Bennett, a Columbus, Oh.-based life and relationships coach. "This includes indicators of his or her credit score. You just have to look for them."
How Money Can Affect Relationships
"Real world" financial decisions factor into your life in myriad ways if a couple doesn't address the financial problems hindering one partner, experts say.
Consider this: With a home mortgage, 90% of lenders are required to use the lowest credit score between both borrowers, notes Jennifer Beeston, a loan specialist with Guaranteed Rate Mortgage.
"That means if your score is 800 but your partner's is 650, we are pricing your loan at 650," she says. "The rate difference between 650 and 800 can be substantial, and affect the type of loan you choose and overall terms."
4 Financial Red Flags
What specific strategies can a romantic partner use to raise any "red financial flags" and eventually have these conversations with potential partners? Financial experts offer the following tips:
1. Pay Attention to Credit Clues
Look for tell-tale signs, Bennett advises. "For example, your date might mention not being able to go out until payday or you notice bill collectors calling his or her phone," he says. "In addition, you can look at the person's domestic situation. Does he or she own a vehicle or always get rides from others—including you—and is this by choice? Does he or she own or rent a home or stay with friends and family?"
2. A Single Credit Card
In some instances, owning just one credit card could be a sign of a disciplined financial consumer. But there are caveats. "The person might own a single credit card with only a $300 limit," notes Beeston. If it becomes apparent early in the dating process that a potential partner doesn't have a decent amount of money to spend—and won't use his or her lone credit card—that's worth an honest discussion.
3. Too Much Finger-Pointing
If someone recently got divorced or filed for bankruptcy, it will come out eventually, says Julie Spira, a relationship and dating coach. "If your new dating partner blames the bad credit on their ex-spouse, it should raise both eyebrows," Spira says. Spira recommends sharing credit scores and reports with your partner to open up the conversation if it looks like the relationship could get serious. "If there's something on a credit report that can be cleaned up, take the steps to do so," she adds.
4. Talking About Money Is Taboo
"It's always amazing to me how talking about money and credit can be considered taboo even with our most intimate acquaintances," says Beeston. If your new significant other backs away from those discussions, he or she may have something to hide, she says.
You'll also want to take notice if your new romantic companion leads a very lavish lifestyle, but is in a job that does not seemingly provide enough income to support that lifestyle, Beeston says.
"Credit is very important in that it will determine the price you pay for the largest purchases in your life," she says. "If you are looking at joining finances in any way you both should be prepared to look at each other's credit reports and discuss how you both can improve to get the highest score.
Don't Let Money Overrule Love
Another key point when you do get to the conversation stage—issuing a judgment or pointing fingers from both parties isn't going to help couples solve ongoing credit problems. People experience financial woes for a wide variety of reasons, and often it's simply a matter of putting the issue on the table, honestly and compassionately, and agreeing on a positive credit-strengthening plan going forward.
No doubt, there are plenty of legitimate pros and cons to flagging credit issues with a romantic partner. To satisfy your curiosity over a love interest with apparent money challenges, don't jump to conclusions, be empathetic and honest, and always drive any problems toward a solutions-based path as soon as possible.
Do that, and the newfound trust gained from a candid money talk can help your relationship prosper for decades to come.