A secure financial footing has benefits far beyond staying out debt: it can also strengthen your love life.
Researchers are increasingly finding a link between a person’s financial health and their relationships, with stronger finances linked to a better romantic outcome. Americans with higher credit scores are 14 percent more likely to find a partnerwithin the next year than those with scores about 100 points lower, the Federal Reserve found last year.
Starting with the first date, people are seeking financial clues about each other, such as their professions or whether they graduated from college, which can be an indicator of income. As relationships progress, that can develop into increasingly frank discussions about debt, student loans and financial goals. Rather than indicating a shallow focus on money, these discussions can uncover important indicators about a person’s values and goals.
“It’s not the credit scores in themselves that matter, but it’s a signal of how they view money, and how they view money as a tool to do other things,” said Sean McQuay, credit cards expert at financial site NerdWallet. “It’s important as you date them that you are trying to learn about them, and exploring what their financial situation looks like, not to judge but to see if you are compatible.”
Credit scores, which are used to gauge how reliable a person is with money, can also extend to personal relationships, the Fed said last year. Creditworthiness, it found, can be a proxy for how people view obligations of all kinds, ranging from the vows to pay back a loan to remaining committed to their relationships.
Four out of 10 Americans say that a partner’s financial situation is more important than their skin-deep assets, according to NerdWallet. But much of how a person views finances and credit comes down to education and income, with more highly educated and higher-income Americans — who tend to have higher credit scores — putting more importance on strong finances.
If Cupid’s arrow has been misfiring, it may be time to take a close look at your finances. For instance, one major misstep can happen early in the relationship, according to NerdWallet’s survey. Having a credit card denied while on a date serves as a red flag for potential partners. More than half of people earning $100,000 or more said they wouldn’t go on another date with a person whose card was denied, compared with 39 percent of those with income below $50,000.
Bad credit can be another romantic turn off, although this may not come up until later in a relationship. Bringing up credit or credit scores is a touchy subject, McQuay said, but one that’s important to discuss before getting married.
The conversation “shouldn’t be judgmental, especially with how complicated the credit score system is, it’s easy for someone to have a poor credit score, but not because of conscious choices,” he said.
Lastly, it’s important to share financial details and be transparent about debt and spending before making a long-term commitment. Unfortunately, 13 million Americans have hidden bank or credit card accounts, a secret that could play havoc in their relationships. While there may be a valid reason for keeping an account secret — such as planning a surprise vacation — it can also signal a serious trust problem.
Secret accounts “would be a very strong signal to me that something fundamentally was wrong,” McQuay said. “If they were actively hiding it from me, that would be a large problem.”
Financial discussions should progress along with the relationship, he added. As couples go from dating to taking trips together, that can serve as an opportunity to talk about income, debt and planning for the future.
“I would be wary of someone who is unable to set financial goals,” he noted. “You should be able to commit to financial goals together.”