What could hiding your finances from your partner do to your relationship?
Do you know everything about your partner's financial situation? Do they know everything about yours? It can be a major point of tension in a relationship - particularly if you've already agreed to live together, get married, or share your banking responsibilities.
If you don't know your partner's credit score, or even your own, you might be putting their finances, and the entire relationship, at risk. When you go to take out a line of credit, but get rejected, or you need to pay for something you thought you had the money for, but all of a sudden do not, there will be a strain on the relationship.
What sort of financial lies matter to your partner?
When we talk about financial transparency, we don't mean that you tell them you've paid the bills on time, only to remember that you forgot and have to quickly go online to make it right1. That's not going to harm anyone - but if you're constantly racking up credit card debt that you can't afford to pay off, and don't attempt to, then your partner needs to know1. By not telling them, you're taking away some of your ability to pay your debts off with the help of your significant other, and compromising their ability to move forward financially.
Particularly if you're married, and you're trying to get mortgage pre-approval, your bad debt and poor credit history could impact your collective ability to get funding for your next, or first, property purchase. It won't just harm your own financial future, so your partner should be kept in the loop.
Have you been totally honest about your financial history with your partner?
Why does your credit score matter?
When you try to get credit, whether it's a personal loan, a mortgage, or even a credit card, your chosen provider may check your credit score. If it's poor, you may not be given the amount you want, or you'll only be offered high interest rates. When you apply for credit the lender can also look at the details provided on your application form as well other information they have on you (such as if you are an existing customer) against their policies and lending criteria to help make a decision on whether or not to accept your application.
The average Equifax credit score in Australia is 749, but a reasonable score is anything above 622.
The same goes for your partner, if you're requesting the loan jointly. An Equifax Sscore is a number between 0 and 1,2002. The average Equifax credit score in Australia is 749, but a reasonable score is anything above 6223.
Before you delve into a serious relationship with shared finances, make sure you know what your credit report says about your financial history. If you're already sharing banking responsibilities, the sooner you are transparent about your credit score, the better. Get in touch with Equifax today for more information.
Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.
1. The Financial Diet. 5 People On What Happened When Their Partners Lied About Money. Accessed February 2017.
2. Veda. How is my VedaScore calculated? Accessed February 2017.
3. SRG Finance. The biggest factors that affect your credit rating. Accessed February 2017.