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Love and Money: Is Bad Credit Bad For Romance?

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By Eva Norlyk Smith, Ph.D.
April 25, 2011

Bad credit can make life difficult in numerous ways. People with bad credit have a harder time getting approved for a credit card or mortgage, and they can even be at a disadvantage when applying for a job. But is bad credit bad for romance, too?

Well, yes, say experts. When it comes to finding that special someone who thinks you’re special too, having bad credit can be a significant obstacle. According to a survey from Money Management International, love still reins supreme as the most important factor people consider in relationships; but finances count, too — particularly now that would-be couples have lived through one of the worst recessions in recent history.

In Money Management International’s 2010 Love and Money survey, 42 percent of respondents said that a partner’s attractiveness was “highly important” to them in a relationship. But almost as many, 40 percent, preferred a partner with a good credit history, and 43 percent preferred a partner with a low level of debt. In addition, 52 percent considered a  partner’s job security to be highly important, and 35 percent counted adequate savings as an important relationship factor. And while fewer men than women saw bad credit as an obstacle to romance, it still mattered to them.

Of course, it’s common sense to not want to inherit someone else’s money problems. Money issues are typically one of the most challenging topics that newlyweds have to contend with; so why stack the decks against you if it can be avoided?

“A person’s credit really gives a snapshot picture of that person’s attitude and habits around money,” says Bethany Palmer, who is co-author with her husband Scott of “First Comes Love, Then Comes Money.” “It tells you a lot about how the other person views money and how they usually manage it. A bad credit report is a red flag that money will probably be an issue if you enter into that relationship.”

Unfortunately, the face of bad credit is not that obvious. People don’t exactly go around with a T-shirt with their credit score printed on it. Indeed, the tell-tale signs of poor credit habits are often the opposite of what one would expect.

“When people are dating someone, they go out of their way to be attractive,” says Michael Sullivan, Director of Education at Take Charge America, a nonprofit credit counseling agency. “So guys tend to spend a lot on dates and gifts, and girls on clothes and hairdos to be more attractive. Many people spend more than they can really afford, and they don’t reveal their true selves.”

Sullivan tells the story of a woman who was dating a guy with all the outward signs of financial stability. He drove a BMW, dressed in expensive designer clothes and treated her to lavish dates. He was obviously well off. Or so she thought. But then, one day, he lost his job, and it turned out that he was leveraged to the hilt. Without a regular income, his fanciful lifestyle quickly fell apart—and along with it the storybook romance.

“Way too many relationships fail because people lie or don’t reveal enough about their credit situation before getting into a relationship commitment.” says Sullivan. “I always tell people that before getting serious with someone, you have to look at the person’s credit report. There are enough surprises in a new relationship as it is.”

So, what can you do to make sure that you won’t wake up the day after your wedding and discover that you just inherited $50,000 in credit card debt? Or just as bad, that you won’t be able to buy a house together for a long time because of your spouse’s poor credit rating? Here are five tips to avoid those unpleasant surprises:

1. Know the warning signs.
Some warning signs are obvious, such as when a credit card gets denied or when your partner seems to have a problem with paying bills on time. Other signs are more subtle and mainly show up as small inconsistencies. For example, if your special someone drives an expensive car or otherwise spends a lot of money, yet has a job with an average income, there’s a good chance that he or she might be living beyond their means.

2. Be alert to what isn’t said as much as to what is said.
If you try to discuss finances, but your partner repeatedly skirts the issue, it’s another warning sign that something might be amiss. Communication is the key to every relationship, so if your partner doesn’t want to talk about money, there’s an excellent chance that there is a problem.

3. Don’t be afraid to ask about a partner’s financial history.
Even in established relationships, partners often avoid bringing up money concerns or issues because they don’t want to rock the boat. However, if you can’t trust your partner to communicate openly about money, it’s usually not a good basis for a relationship.

4. Exchange credit reports.
Sullivan recommends scheduling a time when you sit down and look at each other’s credit reports. Use this as a springboard for getting a sense of each other’s credit compatibility. Do you share the same values around money and credit? If you rarely use credit and your partner has a portfolio of eight credit cards with balances, it may not be a deal breaker, but it’s certainly something you’d want to know about.

5. Eliminate money surprises.
Just knowing someone’s credit score and whether or not they have credit card debt is not enough. Bethany and Scott Palmer point out that it’s important to know a partner’s money personality as well — particularly if you’re getting serious. We each have a basic attitude towards money that tends to guide our decisions, and couples need to understand where they each are coming from and how their attitudes differ.