Is your credit score killing your love life?

As finances are a cornerstone conversation of any serious relationship, learn how your credit score could affect your future.

  • Facebook.
  • Twitter.
  • LinkedIn.
  • Google Plus
  • Print

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.

Topics:
  • Credit
  • Living Together
  • Credit
  • Living Together
  • Credit
  • Living Together
  • Credit
  • Living Together
  • Facebook.
  • Twitter.
  • LinkedIn.
  • Google Plus
  • Print
This article was written by Alexandra Talty from Forbes and was licensed as an article reprint from May 24, 2016. Article copyright 2016 by Forbes.
The statements and opinions expressed in this article are those of the author. Fidelity Investments cannot guarantee the accuracy or completeness of any statements or data.
This reprint is supplied by Fidelity Brokerage Services LLC, Member NYSE, SIPC.
The third-party provider of the reprint permission and Fidelity Investments are independent entities and not legally affiliated.
The images, graphs, tools, and videos are for illustrative purposes only.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917.
764184.1.0
close
Please enter a valid e-mail address
Please enter a valid e-mail address
Important legal information about the e-mail you will be sending. By using this service, you agree to input your real e-mail address and only send it to people you know. It is a violation of law in some jurisdictions to falsely identify yourself in an e-mail. All information you provide will be used by Fidelity solely for the purpose of sending the e-mail on your behalf.The subject line of the e-mail you send will be "Fidelity.com: "

Your e-mail has been sent.
close

Your e-mail has been sent.

Here's what we suggest you explore next

Buying a home this year? Start to get your credit in shape

Are you buying a new house this year? This article explains why building up your credit score is essential before buying a new home.

2% cash back on everyday purchases1

Deposit your cash rewards into an eligible Fidelity account. No annual fees.

You might also like

Will a new mortgage hurt my credit score?

A new mortgage could impact your current credit score. This article explains how your credit report may be impacted by a new mortgage.

The missing step to getting out (and staying out) of debt

It is often easy to feel like you're drowning in debt. This article can help you get out, and stay out, of debt.

This man went from $50,000 debt to running a $20 million company

This article explores how one man paid off an extraordinary amount of debt to run his own small business.

2% cash back on everyday purchases1

Deposit your cash rewards into an eligible Fidelity account. No annual fees.