Samantha Hames

Past Relationships Affect Your Credit Rating

Author: , Published: March 5, 2013
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According to Experian CreditExpert, a staggering 6.8 million people in Britain have had trouble borrowing money because of a partner’s poor credit rating.

Most commonly known as ‘financial association,’ the practice of joint credit recommendation is actually pretty standard  when it comes to most loan, mortgage and credit card applications.

You just don’t know it.

As hard as it is to believe, the vast majority of consumers have no idea that their own credit rating can be affected by a current or ex-partner’s. Yet, 47% of Brits have had trouble lending money because of a loved ones chequered financial past and a further 33% of people continue to feel the repercussions up to three years after the end of a relationship.

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Most long-term couples choose to share a bank account. Those couples who manage to become even long-er term will often take out a joint mortgage or a use a shared credit card. For most, financial union is an inevitable step in a relationship. It’s not to be taken lightly, but it can be a sign of increased security, mutual trust and shared responsibility.

Oh and future heartache.

Love & Money

Experian warns against the financial union of couples who do not have corresponding credit ratings. If one partner’s rating is poor, the other can run the risk of becoming financially ‘blacklisted’ by banks and lenders even after the relationship is through.

Pete Turner, the managing director of Experian, advises couples to remember that credit rating is not a personal system. In fact, there is very little human input whatsoever. Facts, figures and names are all that matter. If you happen to be joined on paper, you are considered legally joined in all relevant financial aspects.

“Financial ties, such as a joint mortgage, a joint bank account or a partner’s name on a credit card, will be viewed on a credit report as an ‘association’ to your spouse or partner. This association will stay on a credit report, regardless of whether the relationship has ended or not – unless a request to have it removed it made.”

What Turner refers to is a ‘financial disassociation order,’ the monetary version of a divorce. He also points out that very, very few people choose this course of action.

Risk Averse

Though it’s hard to doubt the intended wisdom of Experian’s advice; it’s not as if questionable practices like this one are uncommon in the murky world of personal finance, it is somehow still difficult to follow or even recommend it.

Yes, in a perfect world we’d all take pains to be financially independent and secure. We’d monitor our accounts with eagle eyes, count our bank statements and never, never let anybody else in. In a perfect world, we’d never put our money at risk.

But we don’t live in a perfect world, nor would anybody with half a brain ever want to.

Relationships are strange and complicated and messy and unclean. One minute they’re everything, the next they’re gone. And nobody who’s ever truly loved, no matter how briefly, can honestly say that as far as priorities go, money comes anywhere close to the top of the list.

Aging Romeo

When love ages and produces children, mortgages, tuition fees, family holidays and a hatchback, money can be one of the greatest trials a couple ever face. But where love remains, it will never be used to divide, joint bank account or not.

Hopefully, you’ll never get financially burned by a failed relationship. But if you do, wouldn’t you agree that it’s better to have loved and risked, than never to have loved at all, or to have loved with one hand on the purse strings at all times?

If there’s anything worth risking it all for, it’s love, right?

But if that’s too sentimental for you, go get em’ tiger. Financially divorce that ol’ ball and chain.

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