Do you or your partner have stronger credit? My guess is that very few couples know the answer to this question.
You may have know financial details like each other’s salaries and levels of debt. But have you sat down and reviewed each other’s credit reports and scores? Sounds about as fun as dinner and a movie, right?
Okay, a night of checking out each other’s credit is hardly romantic, but it’s infinitely practical and will help you both to understand each other’s financial backgrounds and burdens. Credit can have as much impact on your finances as your yearly salary. If you ever buy a new car or house together or even try to jointly lease an apartment, your partner’s credit is going to affect you.
When you’re asking yourself if you’re ready for a serious relationship with a person, you should also be asking if you’re ready for a serious relationship with their credit. Because—like a nosy family or an annoying habit—credit will eventually play a role in your partnership.
I’m speaking from experience here. I’ve been married for four years and in that time have taken out two mortgages with my husband. But I only recently discovered that his credit score is about 100 points lower than mine. This isn’t to say that I would have chucked him to the curb if I knew about his damaged credit earlier (love you, hon!). But we probably would have worked together to build up his score before applying for loans together. If we both had high credit scores, we could have locked in lower interest rates, saving loads on our mortgage payments each month. Hopefully most other couples are quicker to the chase than we were.
How to check credit and what to look for
Checking credit is pretty easy to do. Everyone is entitled to see their credit reports for free. Start by going to annualcreditreport.com, the government-sponsored site that provides easy access to your credit reports from all three credit bureaus – Experian, TransUnion, and Equifax. Go ahead and order all three reports if you haven’t looked at your credit in awhile. Spend some time with your partner running through all the accounts listed, and make sure there are no red flags listed like a criminal record, bankruptcy, or collection account. A credit report will also show how much is owed each month on car and home payments, as well as minimum credit card payments. This can help you get a sense of your partner’s monthly debt obligations.
Note that the law does not entitle us to our free credit scores. Your credit score is based on the information found in your credit reports, and summarizes how strong your credit is by assigning it a three-digit number (850 is usually the best). You can purchase your scores through annualcreditreport.com, or sign up for any number of online credit monitoring services that will provide your latest reports and scores (usually for a monthly fee following a free trial period).
Your honey’s score may not be important now, depending on where you’re at in your relationship. But if you’re thinking of taking things to the next level, you absolutely should spend some time checking each other’s credit. While each of you will always have separate reports and scores, it’s likely that your partner’s credit will affect you — for better or worse — when you apply for a loan together.
Carrie Davis is a personal finance blogger at SpendOnLife.com, a site dedicated to giving readers accurate information about credit, debt, and identity theft. She is FCRA-certified and has a passion for educating others on how to achieve financial independence. Follow Carrie through the SpendOnLife RSS feed or on Twitter @SpendOnLife.