‘Til Debt Do Us Part: Having The “Credit Talk” With Your Significant Other

‘Til Debt Do Us Part: Having The “Credit Talk” With Your Significant Other

Ah, the first few weeks of a new relationship. That sweet-spot between the nerve-wracking first date and that moment you need to have “the credit talk.” As you and your partner grow more comfortable with each others’ company, and the prospect of living together and starting a life becomes more and more imminent. It’s important to start planning for your financial future. This includes a discussion about each other’s’ credit situations. Most people don’t want to be the person who makes or breaks a relationship based on their significant other’s financial situation. However, when it comes to personal finance, a bad credit score can really put a stick in the spokes.

Does Your Significant Other Have Bad Credit?

First thing’s first. Let’s say you’re past the stage of asking yourselves where you are in the relationship. You and your partner want to get serious. Usually, the first step is moving in together. Your first apartment is right around the corner. Then there are the people who want to skip this step and move straight into their own house. But, what if your partner is not financially stable? This could spell disaster for your relationship and your finances. No better time to have a serious talk about your credit situation. While it’s almost always an awkward one, the credit discussion is important to have even if one of you is reluctant to have it. You might not want to come across as selfish, judgmental or shallow and you definitely don’t want to end a good relationship over what seems like such a trivial thing. However, your partner’s money situation is a valid concern to take into account. You don’t want to move into an apartment or house, only to be smothered in debt from the get go. 

If you’re planning on renting your first apartment, make sure to read this.

How Your Partner’s Bad Credit Can Impact Your Financial Future

Dating is a bit of a different story. When you’re not totally committed to your significant other, meaning marriage isn’t on the table just yet, it’s always possible to work out your own financial situation, and then help your significant other with theirs. If you’ve moved into an apartment, but can’t afford the rent, worse comes to worse, you find a way to pay what you owe, get out of your lease and go back to living at home until your situation normalizes. Before you do move in together, however, it might be good to get an idea of how much income your partner makes yearly, what their credit report looks like, and how much debt they might have on their plate. This is especially important if you’re planning to split the rent evenly. Considering all the other expenses associated with renting an apartment, if your partner can’t afford to pay their share, you could see your savings draining away quickly. Once these concerns are out in the open, you can start working things out.

Then Comes Marriage

If you’re planning on getting hitched, you should have had the credit talk already. With marriage comes a whole slew of other things to be taken into consideration, like buying a house or property, having children, and eventually retirement. Being that you and your spouse will most likely be combining your incomes and with it, your expenses, it’s very important to know how you both stand financially. Mortgaging a house, of course, is an enormous commitment that you two could be paying back for years to come. Having an unstable credit situation could not only impact your lives but the lives of your children if you plan on having them. If you want to have anything set aside for them, making smart investments is key. Opening a savings account and setting aside a portion of every bit you make is a good start. Making the effort to not get stuck with a ton of credit card debt will have a huge impact in the future. 

Check out this other article to see how marriage can impact your finances.

Discussing Your Situation, and What You Can Do 

No doubt, it’s extremely beneficial to know where you and your partner stand financially. If your significant other has bad credit, don’t jump the gun and kick them to the curb right away. If you’re having difficulty figuring things out, talk to a professional financial advisor. They’ll take a look at your partner’s yearly income, review their financial stability, and give them advice on how to start getting out of debt. Depending on how much your partner owes, it’s always a smart thing to do, considering the downsides of getting stuck with a ton of debt.

Consider Coming to a Legal Agreement

If your significant other’s credit situation is still a worry, you can always look into a cohabitation agreement, or in the case of marriage, a prenuptial agreement. Contracts like these are made so that both parties are treated properly if breaking up or getting a divorce becomes the only option. This will divide your assets and properties the way you see fit and will help resolve any conflict that might arise during the separation or divorce procedure. While it’s another sticky subject to discussed, it’s also something that should be considered.    

Discussing your finances is a significant part of any relationship. It can be just as, if not more nerve-wracking than that awkward first date. However, ending up in an unstable credit situation would be even worse. Your partner might be stuck with debt, talk to them first, they’ll more than likely want to take the steps necessary to ensure that you’re able to build a healthy financial future together.  

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