Celebrated worldwide as the month of love, February often gives a little extra spark to relationships everywhere. Whether you’re making marriage plans or looking forward to buying your first home together, do you know everything there is to know about your partner’s spending habits?
As well as sharing your past relationship stories, and knowing which nosy aunt to be wary of at family parties, it is an absolute necessity to have the chat about where you both stand financially in order to take the best steps for your future together, to identify where your financial priorities match (or don’t!) and to plan for future financial wellness.
Credit underpins everything related to financial wellness, so it’s worth taking note of these tips from Garnet Jensen, senior director at TransUnion, designed to improve your credit score.
Talk about it
A TransUnion US survey shows that more than one in three (38%) of engaged couples don’t talk about their credit ratings. Start by openly discussing finances with your partner and reviewing your credit report to assess your current situation and prevent any surprises when it comes time to finance a larger purchase like a house or car.
Prepare to build a love nest
Do you consider yourself to be a saver? It is important that your budget tactics and financial goals are aligned before you take your next step. If a big financial asset purchase is your joint goal, then that expensive diamond ring may have to wait as couples with lower credit scores may receive higher interest rates or even be rejected for loans.
Credit scores don’t marry up
When jointly applying for credit, the lower score may dictate the rate and terms you’re offered. That’s why it is important to discuss your current credit score with your partner and make a constructive plan to improve it where necessary. TransUnion offers all consumers to check their credit reports annually at no cost, and it’s worth logging on to fully understanding your rating.
Stay in it for the long haul
Relationships aren’t built overnight and neither is credit, so don’t worry if you’re score isn’t what you want it to be. Building a history of on-time in-full payments demonstrates responsible borrowing habits and can positively affect your credit score and give you a better chance of building assets in the future.
Max out your heart, not your wallet
Although surprises and gifts may impress your loved one, they could be responsible for an increase in your credit utilisation, causing negative credit score implications. A careful budget should always be in place when trying to plan for larger purchases, allowing you to only spend within your means.
Don’t overplay the field
Even if your days of playing the field are behind you, juggling several lines of credit may lead to just as much of a challenge. Opening new lines of credit can negatively impact your credit by signaling a need for fast cash to credit providers. Monogamy in your financial life as well as your romantic one will lead to happiness in the long-run.
Identity thieves are after more than your heart
Ensure you and your significant other is protected from identity theft with TransUnion’s Credit Report, Alerts and Score product. Add further protection by regularly monitoring your credit to ensure the information is accurate and up to date.
Discuss debt before marriage
Like marriage, your combined debt is a contract. Around 19% of couples claimed they owed money to family, with 50% of the married and engaged couples stating car payments and student loans were their two sources of debt, according to the TransUnion survey. Whilst debt doesn’t have to be a catalyst in your relationship, it is important to understand where your partner lies with both their official and unofficial spending habits in order to give your relationship or marriage the brightest financial future.