Love and credit scores

by Shelton on February 25th, 2016

filed under Credit Scores

Thats the number used by the credit industry that evaluates your debt payment history. Your score determines your creditworthiness when it comes to such things as applying for a mortgage or obtaining a car loan.

Three economists reviewed data from the Equifax credit reporting company, covering millions of consumers over a 15-year-period that ended in mid-2014.

Heres where it gets a little deep: In their data screening, the researchers identified committed relationships by noticing when two individuals who had not shared addresses began to do so and continued to live together at least one year. The data did not distinguish between married and non-married couples or cohabitants.

The researchers said in the report that their goal was to examine how credit scores play a role in the formation of committed relationships, such as marriages and long-term cohabitations, as well as the couples ability to maintain the relationship.

Generally, what they found was this match: People tend to form serious relationships with people whose credit scores are in the same range.

Among the details:

–For every additional 93 points or so in a couples average credit score at the beginning of a relationship, their odds of separating during the second year of their courtship dropped by 30 percent.

–On the other hand, if the gap between a couples individual scores is greater than 66 points at the start of their relationship, the couple is 24 percent more likely to split up within their second, third or fourth year.

Poorly matched couples may face challenges in jointly managing household finances, such as managing debt, paying bills or saving for a rainy day fund, the report said.

The researchers offered another link between credit scores and successful relationships — trustworthiness. In other words, the report said, credit scores matter for committed relationships because they reveal information about general trustworthiness.

Does all this sound complicated? It really isnt.

To be sure, low credit scores can lead to financial stress, and those difficulties can often spill over into the relationship and destroy it.

One other takeaway from the Fed report: Dont make money a taboo topic with your spouse or dating partner.

A 2015 survey from TD Bank of people who were either married, engaged or in relationships found that couples who regularly talk about credit card debt, spending, saving and, yes, even their credit scores are happier in their relationships than those who discuss finances less frequently. And money problems are one of the leading causes for divorce.

(Questions, comments, column ideas? Send an e-mail to srosen(AT) or write to him at The Kansas City Star, 1729 Grand Blvd., Kansas City, MO 64108.)


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