Millennials are saddled with more debt than previous generations and it seems that they are more interested in their significant other's economic history than ever before. Which is great, as an open dialogue about finances is the cornerstone of any romantic relationship.
Almost two in five Americans say that knowing someone's credit score would affect their interest in dating that person, according to a recent Bankrate.com report. Out of all the age groups polled, millennials were most concerned, with 42 percent saying that a person's credit score would negatively or positively impact a potential mate's desirability.
Describing the number as a "quick measure" of stability, Sean Quay, credit card expert at Nerd Wallet, says that a credit score can be an easy way to see if two partners are aligned financially. The married millennial says he would take the figure into account if he were still dating.
"If my financial life is going to be legally yoked to someone else, I'd like to see that he has a healthy relationship with money too," says Erin Lowry, personal finance blogger behind the hit site Broke Millennial. A proponent of frank talks about money, Lowry has written about tricky money conversations she has had with her boyfriend, including balancing unequal incomes.
Although a bad credit score should lead to a conversation, it shouldn't necessarily be grounds for writing off a relationship.
Robert Hoyt, personal finance blogger behind MillennialMoneyMan.com, paid off $40,000 in student loans in one and a half years, in part so that he could propose to his girlfriend.
Although she wasn't worried about his finances, he didn't want to begin a marriage with debt. After that experience, he says it is important to look at someone's overall financial health rather than judging them on a number.
As for red flags, experts agree that anything below a 700 (FICO score) is cause for a pause.
While it might not be grounds to break up it should lead to some questions.
"It could be because of a stint with identity theft. Perhaps a medical bill went to collections that your partner didn't even know existed in the first place. These are easily fixable issues," says Lowry. "However, a credit score that's due to a report riddled with late or missed payments, multiple items in collections and defaulted loans would make me second guess staying in a relationship if the person isn't making visible efforts to turn his financial life around."
A low credit score making you nervous about dating? Here are some ways to keep that number healthy.
Know Your Number
According to Bankrate.com, 34 percent of Americans don't even know their score. Don't be one of them. Luckily, nowadays, credit scores can be obtained for no cost.
Pay Off Cards in Full, Every Month
This might be boring, but paying off all cards in full every month is the easiest way to build trustworthiness with a creditor. During college, Lowry was able to build up to a score of 720, although she didn't have any student or auto loans. Following her dad's advice, she used one credit card, made a small purchase each month and then paid it off on time and in full.
Use a Credit Monitoring System
Quay thought he had set an account to pay in full automatically, but after a year, realized that it was set to only pay off the lowest possible balance monthly. Unfortunately for him, the account racked up interest on a $500 balance for a year.
Credit monitoring systems see negative changes like this. They can also alert users to identity theft. Some charge money for the service, while others do not. They are not all created equal.
Keep Old Accounts Open
The average history of an account is one factor that is used to create a score. Since most millennials haven't had credit cards for more than 10 or 15 years, keeping old accounts open is a good way to keep this number higher.
Quay estimates the cycle is every 18 months, so he uses his older cards once a year in order to keep them open. A bank has no obligation to tell you before shutting down your line of credit, so using an old card once a year is a good rule of thumb to stick with.
Dispute "Oops Moments" With Credit Bureaus
We all make mistakes. And when it comes to credit, it could be worth it to dispute a real accident.
Manage Utilization Rates
While there is no official number for how much credit a person should spend at any one time, experts agree that keeping your monthly charges at 30 percent of your total available limit is a good rule of thumb.
Hoyt keeps his at a low 10 percent, while others say trying to keep credit at 20 percent is a good idea, as then you have a 10 percent "cushion."
It is also important to consider credit utilization rates across all cards, as well as individual cards, since both count towards overall score. If one card has a very low limit, keep its utilization rate at less than 30 percent, even if overall you have more credit.