By Polina Polishchuk, NextAdvisor.com
Having good credit is an important factor in maintaining one's financial health, but should it be a factor in your relationships? Bluntly, is it okay to date someone with terrible credit? The answer is yes, it is okay -- unless you are planning a future with them. It's not only their actual credit score that may cause problems for you in the future, but their attitude towards their credit and financial health overall.
Asking someone you're simply dating about their credit score over dinner is definitely a bit crass, but if the relationship is getting serious and marriage is on the horizon, shouldn't your financial goals and priorities be in line with one another?
Data compiled by the financial management website Manila showed that 65 percent of respondents said they argue about money with their partner. Good or bad credit has an impact on a person's financial status, and if your potential life partner's credit score is in the dumps, there are a couple ways this can affect your otherwise happy life together.
Bad credit could point to deeper issues of irresponsibility.
Bad credit can be the result of late or forgotten payments. If your significant other is constantly forgetting deadlines or simply does not care about paying his or her credit card and loan bills on time, they may be irresponsible. If responsibility is an important trait in a potential spouse, bad credit due to indifference is a red flag.
To remedy this, he or she should have a general picture of their credit and how different factors, like missing payments or using credit cards to their limit, affect it. Every consumer is entitled to a free credit report every year from each of the three bureaus -- Equifax, Experian and TransUnion -- at annualcreditreport.com. If your partner wants to gather more information about his or her credit, it would be smart to sign up for a credit report monitoring service, which provides updated credit scores in addition to credit reports. Many of these services have special tools to help users determine how different financial scenarios will affect their credit score and can help catch identity fraud as well.
Your partner's bad credit can negatively affect your credit score.
Continuing to make late payments or missing payments can be a big problem if you open joint accounts. Unless you plan to take charge of all joint accounts after you get married, it is a good idea to help your significant other mend their irresponsible credit ways before you tie the knot.
If your partner has trouble making payments on time, a good idea would be to set reminders and/or automatic payments for their current credit accounts. Not only will this help get their credit back on track, but it would also give him or her good practice in making payments responsibly.
Getting a mortgage or even renting an apartment may be more difficult if one of you has bad credit.
These days, landlords are becoming more and more strict on who they rent to. In addition to requesting your pay stubs, they are prone to asking to see your credit reports in order to determine your trustworthiness as a potential tenant. Furthermore, after you are married, lenders will use both you and your spouse's credit scores to determine if you are a suitable candidate for a loan or mortgage, so making sure both of your credit reports are clean is key.
How to ask your partner about credit.
If you and your partner are serious about marriage, then it's important to discuss your financial goals and make sure they are in line with one another. In this instance, full disclosure is key. So that there are no negative surprises in the future, like when you two are applying for a mortgage, both of you should be honest about your individual credit and debt status.
Again, it's not your significant other's bad credit that should be a deal-breaker, but their willingness or unwillingness to mend it. If they are open and enthusiastic about getting on the right financial track, encourage them to improve their credit by helping them review their credit reports and take the necessary steps to fix any errors. If they have a limited credit history, help them apply for new credit cards that can help them optimize their credit utilization ratio. In the case that their bad credit keeps them from qualifying for a new card, encourage him or her to sign up for a secured credit card that reports to the three credit bureaus, which can help them build creditworthiness and give them good practice with plastic.
If your relationship is just starting out, a person's credit shouldn't worry you too much. The point is that these credit matters are certainly something to consider when things start to get serious.