Here’s an interesting article from Jezebel:
If You’re Looking for Love, You Better Have a Good Credit Score
John Hendrix, a 33-year-old chemist in San Francisco, said he worried that the vast disparity between his girlfriend’s credit score and his own low one could create tension in their relationship. When the couple leased a car in October, Mr. Hendrix had to leave his name off the contract because his poor credit scuttled his chances for the bargain interest rate that his girlfriend qualified for.
From the original NYT article:
She simply couldn’t help it, though. After all, he was tall, from a religious family, raised by his grandparents just as she was, worked in finance and even had great teeth.
Her musings were suddenly interrupted when her date asked a decidedly unromantic question: “What’s your credit score?”
“It was as if the music stopped,” Ms. LaShawn, 31, said, recalling how the date this year went so wrong so quickly after she tried to answer his question honestly. “It was really awkward because he kept telling me that I was the perfect girl for him, but that a low credit score was his deal-breaker.”
While I agree that a couple should have a frank discussion about finances if they are considering merging in some way. Up until that point, I don’t see why it matters. Not only that, but I’d be more concerned with whether or not they live within their means and seem responsible with their spending than a credit score. While the credit score often reflects someone’s spending habits and money management ability, many times it doesn’t accurately reflect the strides someone has made to become more financially responsible.
I could never discount someone based on a three digit number. I’d have to have a fuller picture in order to make such a decision. To me, there’s something off about someone who cries poor a lot but who smokes, orders a lot of take out, belongs to an expensive gym, etc. To me, that shows their inability or unwillingness to sacrifice. Which, as we’ve discussed before, is really the core of commitment. Equally troubling are people in between apartments and couch surfing who are actively trying to date. Dating is expensive. 4 or 5 dates a month is a few hundred dollars. How important could it be to someone to get an apartment if they’re taking that much money away from the more important necessity of having a roof over your head? These people aren’t looking for partners, they’re looking for providers.
How important is someone’s credit score to you? Is it a determining factor or do you consider other issues like spending habits or how much debt they do/ do not have?
Which would you rather…someone with no debt but a poor credit score or someone with a good credit score and sizeable (say over 25K) debt?
There is good debt (mortgage/student loans), and there are bad debts – (credit cards that are maxed out) without the ability to pay back at the end of the month – and with a whopping 18%+ interest rate–without sight of even negotiating a lower interest rate. Why? Because the card carrier is a high risk, and has terrible spending habits – lives above their means and is irresponsible. Bottom line–what future does someone that is not fiscally fit offer a man OR woman who is? They are a liability. That simple. And yes, there are men – like there are women out there – looking for a financial savior – someone to take care of them – a “provider”. And who wants that burden. I want an equal partnership…and someone who shares my values when it comes to saving and spending within my means. And being able to sacrifice (for their future)–and perhaps “our future”. Now – if you are dating without really thinking that far ahead or don’t care about a future? Then it won’t matter – if the person is couch-surfing, living with mommy when he is in his 40′s, or living in his basement off of his parents, and has bad debt, a very low credit score, etc. Your expectations will be as low as his credit score! LOL
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At the end of the day when you owe someone else money (credits, loans, etc) it’s still debt. I think someone who is debt free would make more sense to me because it means they’re not dependent on borrowing money (loans, cc, etc) to live. A credit score just shows who reliable you are when you borrow, not money managment skills.
Hot debate. What do you think?
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Sure–but let’s be realistic…how many people have absolutely NO debt? Especially if they are homeowners, and have gone for advanced degrees – or even undergraduate education is costly. If someone has a student loan – and a home–it demonstrates that they do have goals–and rely on themselves – have responsibility, and equity too. A home that is their own, and they are able to finance it – get a mortgage through a bank. Banks today are scrutinizing people even more today – thanks to the real estate bubble that burst. When a person doesn’t have any debt – and they just pay cash for everything–they also show me that they don’t know how to manage their expenses and how to maximize by increasing their credit score – by using their credit wisely. I can understand someone in their 20′s being irresponsible…but by late 30′s and definitely 40′s–if any man or woman is not on their own, and their expenses are all over the place…it’s just who they are, have been, and probably always will be. By a certain age, a mature adult should know how to handle their live, their relationships with others and their relationship with money.
Hot debate. What do you think?
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Listen it is possible to have a BBA and MFA and still have no debt and have substantial savings be in your late thirties…. I did …. Granted I don’t have a house, but that’s next in the list…
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how many people have absolutely NO debt?
A lot of people, actually. About one third of Americans own their home free and clear. (About one third have a mortgage, and about one third rent.) Many people pay cash for their cars and drive them into the ground. They have no need to go into debt because they have enough available assets to purchase whatever they want/need outright. This used to be considered a good thing, but apparently you think that living within one’s means is somehow irresponsible.
If someone has a student loan – and a home–it demonstrates that they do have goals–and rely on themselves – have responsibility, and equity too.
Borrowing money to buy something you can’t afford is a rather odd idea of self-reliance. You’re relying on a bank for that money, not yourself.
A home that is their own, and they are able to finance it – get a mortgage through a bank.
Until you pay off the mortgage, you don’t really own that house; the bank does.
When a person doesn’t have any debt – and they just pay cash for everything–they also show me that they don’t know how to manage their expenses and how to maximize by increasing their credit score – by using their credit wisely.
You seem to be assuming a world where nobody has a net worth of any significance, where people live paycheck to paycheck and are unable to save up for what they want to buy.
I could have paid cash for my house; the only reason I didn’t is that I prefer to keep my assets more liquid. That says nothing about how I “manage [my] expenses”; my expenses would be about the same either way. I live within my means, and that’s what matters–not which piece of plastic (debit or credit) I pull out when paying for something.
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Given the choice between good credit and no debt, I’d prefer no debt. Bad credit is a much easier problem to fix and one less likely to drag you into than someone up to their eyeballs in debt. Ironically, I’m actually up to my eyeballs in debt between the mortgage, car note, and student loans. But it’s all considered “good” debt. And I can afford to pay for all of it – so does that make me a potential bad life partner?
A person’s credit score and debt situation is really no one’s business – until you are at the point where you’re moving in together and potentially buying big-ticket items together like houses or cars. Then it is your business. Is a bad credit score/debt situation at that point a dealbreaker? I’d say probably not. If I’m head over heals in love with someone, I don’t see myself dumping them just because of their financial issues. What I will do is take steps to protect myself from said issues.
If you’re marrying someone with a lot of bad debt, get a prenup that clearly states each party’s debt coming into the marriage and any post-marriage debt solely in each partner’s name remains their own responsibility. Further, do not get any joint credit cards, sign a note as a co-signer, or open any joint accounts. Keep everything financially-related seperate. Also, never rely on another person’s income to pay the bills. As a general rule of thumb, you should never buy anything you can’t afford by yourself without help. In the case of bad credit, the easy work-around is simply not to include the person with lousy credit on any loan applications.
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No–it doesn’t make you a bad partner…read above what I wrote. It demonstrates that you rely on yourself–and have have mom or dad taking care of your needs. It display self-sufficiency…nothing wrong with that. It’s not realistic to expect someone to be debt-free – when they have acquired a home, and an education all on their own. Even a car. The point being made is – some people are living above their means – don’t have a pot to piss in – yet they are going to Equinox to workout–and/or driving around in a new Lexus or BMW. It just shows that that person lives above their means and really doesn’t care about saving….and again…not judgment–but someone like that is probably going to but heads with someone that is more conservative and lives within their means. If you get involved with a man or woman that gambles away everything, or maxes out a credit card – you don’t want to have that liablity on your hands. So–yes–getting that prenup – with those stipulations that you have mentioned would make sense to me.
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meant to say – you don’t have mom or dad as your ATM machine.
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I’m someone with no debt. I spent the last 2 years paying off everything that was listed on my credit report. I was extremely financially irresponsible in my twenties and thirties, was laid off three times but have made great improvement over the past couple years.
I have no school loans. All taxes are paid and up to date. My credit score is stuck in the low 600′s because I don’t have any revolving credit. I’ve applied for a couple of cards and been denied because of my low score. I need credit to get a better score, but I can’t get credit because of a low score. I’ve been researching secured CCs, but I’m a little suspicious of inputting all of my data on an online form. I also don’t want to have a bunch of hard checks which will knock a point or two off my score. Are their any cards for which I could apply that wouldn’t involve a hard check? I don’t mind getting a secured card but would prefer a CC with a modest credit limit so I could make monthly payments and build up my score.
Would a man be concerned about my situation?
Any feedback or suggestions would be appreciated.
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Why don’t you see if your bank offers (non-secured) credit cards?
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Unless they can guarantee that she’ll be approved, with the credit line determined by her score, that’s probably a bad strategy. Too many hard inquiries hurts your credit score, and it sounds like she’s already got too many. She needs something she knows she’ll be approved for, and for most people the only guaranteed option is a secured credit card. After two years, past hard inquiries will fall off her credit report and she can consider a speculative application.
FWIW, I once handed applications at a store that advertised “Bad Credit? No Credit? No Problem!”, but about one in three applicants got turned down. Stores’ standards are lower than mainstream lenders, as the only people applying for such cards are the ones who get denied everywhere else (and two out of three got approved), but don’t be fooled into thinking they’re guaranteed. They’re not.
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I think you’re overly concerned about the hard check. I have an excellent score and have gotten 2-3 new cards in the past year. Hasn’t hurt me with refinancing my mortgage.
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Are their any cards for which I could apply that wouldn’t involve a hard check?
Applying for a credit account (or increase of credit limit at your request) always results in a hard inquiry. Soft inquiries can only be used by existing creditors and by non-creditors.
I also don’t want to have a bunch of hard checks which will knock a point or two off my score.
Excessive hard inquiries are more of a hit than that, but the first two within the last 24 months are free. So, do your research first and apply for one card that you know you’ll be approved for, rather than applying for a bunch of cards and seeing who approves you.
I don’t mind getting a secured card but would prefer a CC with a modest credit limit so I could make monthly payments and build up my score.
A secured credit card is a credit card, and there is nothing on your credit report indicating that an account is secured. Most will give you a credit line equal to what you deposit to start, though they will gradually increase it later without requiring an additional deposit if you make all (and I do mean all) your payments on time.
For (re)building credit history, the best strategy is to use a secured credit card for your recurring bills, rather than a debit card, and pay it off each month; that results in no net change in your monthly cashflow, but it will improve your credit score–well worth the typical annual fee of $50. After 2-4 years, you can switch to an unsecured card, get the deposit back from your secured card, and continue your responsible use.
(The reason to switch: a secured card is unlikely to get you a credit line of more than $1000 over your deposit, no matter how long you have it. With a few years of good credit history and a decent income, you should be able to get an unsecured card with ten or more times that limit. Not that you should run out and use it, but a high credit limit makes it easier to achieve a very low debt-to-credit ratio, which positively affects your credit score.)
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Articles like the NY Times one are the things that keep people single. Hope their sterling credit score keeps them warm at night or visits them in the hospital when they are sick.
We’ll see the women and men in the article in a few years in an article “45 and single- where are all the good men/women?”
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Yes, but even if that person was married there’d be no guarantees they’d be warm at night or anyone visits in hospital if they’re sick. There’s a lot of unhappily married debt ridden people out there. It’s smarter to stay single than it is to let someone else drag you down because they are not responsible with their money. I know too many people who wind up divorced and bankrupt because of the selfish spendthrifts they married.
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The “What’s your credit score” question is one of those things that I see pop up now and then, usually in the context of some article talking about “Questions you don’t ask but probably should” or somesuch.
It’s sort of useful to know someone’s credit score, but it’s really only relevant at a point where that score would matter. It’s an abstract thing with practical implications that only really count when you want to get a loan or credit from someone else as a couple.
The debt thing is a more immediate issue in that it can directly affect your daily life. You can’t afford XYZ if you’re worrying about that next bill.
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The credit score per se shouldn’t be an immediate concern while dating…however, if you are serious in terms of dating with the end-purpose of settling down and starting a family–building a future–you do want to be certain that the person you are spending your “valuable time” with knows how to handle their finances – and doesn’t spend 10x what they don’t have, or are able to pay off at the end of the month. And that they are not going to place you in a position where you end up having to share that liability….since it wouldn’t be your responsibility if things went sour. And that goes for men as well…a reasonable man is going to be concerned if a woman lives beyond their means, still needs mommy or daddy to step in and clean up whatever financial mess they have made. If you want to buy/build a home with someone–you want to partner up with someone that can contribute that way, and able to be responsible for their expenses. And by the way, when “they are sick in the hospital”…at least people who do take some responsibility will have options and be able to secure medical attention…and not depend on others for that.
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I don’t disagree, but the score is a bizarre shorthand to get to that, particularly given that you may have changed your behavior and the score will still be low. Maybe you’ve got someone who hates using credit cards, and so maintains no revolving accounts. Ergo, low score. Not because they can’t manage money, but because they don’t have existing lines of credit by which the credit reporting bureaus can gauge them.
I’d figure you can learn how someone manages their money by, oh, dating them and watching them manage their money.
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That’s precisely the point I was making. Rather than judge someone based on a “number”…it’s best to sit back and observe how they manage their finances. This does take some time, but getting to know someone takes time. One can’t measure everything within hours of meeting them, and make such assumptions right away.
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I have lived through this type of situation before, so I speak from experience. I have excellent credit, not necessarily because of anything great I ever did. I just lived a responsible financial life…ie. bought a place to live and promptly made all the payments, didn’t rack up credit card debt, paid my student loans in accordance with the terms, etc. I was in a serious relationship with a woman for over a year and we were head over heels for each other.The credit score thing only came up later in the relationship. She mentioned her credit issues. Unfortunately, I tuned it out when it came up, as I saw so many other qualities I liked in her. Many other compatibility issues came out as the relationship developed. What I noticed about the poor credit score was that it was indicative of overall problems with being responsible with one’s life in general. I’ll grant you that sometimes people have bad luck and get laid off or have medical bills, and thus, have very good reasons for bad credit. However, none of this applied to her. She simply handled her financial affairs poorly. I sometimes tried to help her, but I could clearly see that at some point you can’t change someone’s bad habits that are written in stone. I’m sure this can apply to any self-indulgent bad habit…over eating, drug use, etc. The person has to be receptive, willing and motivated to change. Granted, if everything else was great in the relationship, maybe it could’ve worked if I had handled the finances. I suppose the lessons I learned from this experience are 1) people are difficult to change, and 2) bad credit can be indicative of overall bad habits in other areas, and 3) look at the credit problem against the overall picture of the relationship.
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Or it could be based on emotions like my ex-sister-in-law. When she was dating my brother she was all happy and he was buying her stuff. So she was being good and she is a good con-artist type of person. They get married and he finds out she has really horrible credit. Then later when she is bored and unhappy she takes out new cc’s and max’s them out and trashes there credit score.
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I’d rather have someone that has good credit and a lot of debt. To me, that shows responsibility. No credit leads me to believe someone cannot manage their finances well. This from my own experiences with finances in relationships
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Eh? I had a poor credit rating because I never borrowed money.
Had a credit card, never used it, don’t like paying interest to banks.
Same with cars, borrowing money for a rapidly depreciating money sink? Duh!
Turns out this is worse than being bankrupt for Experian et al.
So I started putting recurring bills through the CC just to build it up, apparently I’d do better if I paid some interest and stopped being a “bum customer” and settling every month in full.
You have to understand that credit rating is not a measure of financial wellbeing. Its a measure of whether you are a good credit holding customer which isn’t quite the same thing. What a mess we in the Anglosphere have gotten into.
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If you meet a great person who has a lot of debt….check to see if they have a plan to reduce the debt. it is like meeting a fat person who is actively working to get thin! Lots of things can create a debt crisis. It is how you handle the issue that reveals character. Look at core values. In the long term….that is what counts. If you take two years to really observe a person’s behavior….you are seeing the real person.
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I can hardly imagine a more inappropriate question on a date.
Do frank discussions need to happen? Sure, after other levels of a relationship have had a chance to take shape. And that takes time, Is that what this is about? We don’t want to invest any time or effort into something that might not work out, so let’s pull out our list of deal breakers and make sure no red flags pop up right from the very beginning?
That’s not what a first date is about. Or a second or third for that matter.
People aren’t mergers and aquisitions. It’s not about balance sheets and cash flow, assets and credit checks, for Pete’s sake. If it was, then the 29 aspects of compatibility they align you to on eHarmony would result in finding a perfect match every time.
Do you really have issues that knowing my credit score would resolve? Well then I guess it’s good you put that on the table because now I’ll know your mentality is something I would NOT care to invest more of myself in getting to know either.
Hot debate. What do you think?
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Well…it’s obvious to any sensible and/or sensitive person with manners that it is inappropriate to ask such a question in the very beginning. But eventually, a conversation about such matters is rather important. And as noted by other people above, one can assess the situation by have their eyes opened and paying attention to the other person’s spending and behavior. Because, ultimately, as unromantic as it may seem….it is important to align oneself with someone who shares similar values – and ideas about managing money matters. Who said anything about discussing such a topic on a first, second or even third date? That’s absurd. And people do “merge”…they merge their lives, their values and in many cases their assets. A mature adult realizes this, and does want to be on then same page as their significant other. It has nothing do with one’s mentality or genuineness towards wanting to be with someone else for the right reasons. You also don’t want to waste someone else’s time by avoiding such discussions. If two people are right for each other, having these types of conversation should not be an issue. It can be done with much tact in time. Not right away…but down the road, such questions are inevitable. After all, if you are thinking about spending your life with someone…no topic should be off limits.
Hot debate. What do you think?
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It is all about timing! I have run into a bunch of guys who are looking for a Sugar Mama. Balance sheet issues come up as soon as the second date. This sort of guy is to be avoided. The last one ditched me when a lady with a really fat blance sheet came along….when that fell apart….he came slithering back. It was never about any emotional issues….it was about money.
I am amused when people think women are the ones looking for a financial bail out. I am now seeing guys who have been raked over in property selttlements in divorces.
In the interest of fairness, if both parties are taking responsibility for their financial stuff there should be a green light.
PS…..Look out for people who are waiting for relatives to die. These are real losers. The key is being a responsible person when it comes to money!
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Elizabeth,
Please pick ONE username and stick to it. I’m constantly having to approve your comments and it’s a pain in the ass.
Hot debate. What do you think?
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What about the third option, the “millionaire next door” type?
99% of the time people think this is the way to go. Its what being middle class is about right?
But there is no getting away from the fact dating is about display.
I bet 99% would pick the person with the maxxed out credit who looks rich.
Even though everyone knows that rich people, outside certain elite circles where nobody would be impressed anyway, are rich because they don’t waste money on display. A classic I’d never date the sort of person I’d want to marry dilemma?
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99% choose the guy with maxed out credit? Really? I drive a beat up old car but have no debt other than a mortgage and it’s never been an issue for me. I do make an effort to dress well, but not with ultra-expensive clothing. Nordstrom Rack is high end for me.
Then again, I don’t live in a place like NYC where people wear suits to work. Flip flops are more common than wingtips here. In fact, when I see a guy in a suit I assume he’s chained to desk at a bank or insurance brokerage instead of doing what he really loves.
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As a financially responsible person in her mid-20s (thanks, Dad, for drilling money smarts into your daughters), with “rock-star credit” according to the last person who did a check on it, no debt at all besides my rent obligation and a few medical bills that are soon to be paid by a third-party – I would be OFFENDED if someone asked me that on a date. As in, seriously? You don’t care about my values, my goals in dating, preferences in a partner, or if we have chemistry or not? What matters to you is my credit?
I would take myself and my awesome financial situation right out the door and never respond to him again. I think it is rude and inappropriate, but let’s thank them for revealing their overly-analytical nature and shallow money-focused thinking so early on. yikes!
Now, that said, I do agree that it is important to keep your eyes wide open to a potential partner’s situation. But this is easily determined if you watch and listen. THe last guy I was in a relationship with had some debt (nothing serious, but pretty scary to me who never had debt beyond a car loan that was paid off in 7 months), and almost no savings at all. I knew that if we got serious that I would be the oen in charge of finances and most likely the one to make sure we were secure. I devised a plan in my head on how we would handle our different attitudes and habits regarding money so that I would not be stressed out and he would not feel overly-restricted (I never revealed it as it did not get to that stage), but would keep us secure for the future. I also considered a pre-nup, but it would be ridiculous since my savings is not more than 100k at this stage of my life. Point is, have a plan; something in mind to make it work, and if the debt or lack of savings is a deal breaker (understandably), run! It is important, not MOST important, just very important.
Hot debate. What do you think?
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SB: Sometimes people need to fall or hit rock bottom – to get up, dust themselves off – climb out of debt (slowly–but surely)–and learn from this mistakes. But those type of life lessons should be learned early on – when you are in your 20′s…and you are a better, more prepared person when you hit your 30′s and most definitely by your 40′s+. (One would think). Actually, if I were in a relationship that turned serious, and a man asked me about my credit–I would find it to be complimentary. Why? Because it shows me he takes me seriously–and is viewing me as a life-long partner, someone he wants to partner up with and take that next step. If that’s what you ultimately want – to build a future–I don’t find it offensive for someone to do their due diligence. It demonstrate that they think ahead, and are planning for a future. It’s called “having a plan”. Obviously, if you have worked very diligently all your life to accumulate a certain amount of wealth and property–it would be advisable to look into a pre-nup. It’s understandable. There are no guarantees in life. One needs to protect their assets. Man or woman. Nothing wrong with that. Divorce rates are extremely high. To you – 50K may be nothing, but that all depends on what a person had to sacrifice in life to get that 50K. it’s all relative. Again, to ask someone such a question at the very beginning stage of dating…it’s quite inappropriate. Timing as always take precedence. Values, goals and of course chemistry are necessary. By the way, a goal may emcompass finances. People don’t realize how much “finances” impacts our lives. And as someone (Larry, I believe) may have pointed out – the manner in which someone handles their finances says a lot about other areas in their lives. It’s all about finding that someone who shares your values…as well as your “financial values”. That does take time to discover.
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Eliza, can you please refrain from responding to EVERY comment? I don’t mind if you contribute, but you have a habit of writing the same thing over and over 12 different ways and it clogs up the comment stream.
Hot debate. What do you think?
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I have a question:
My name is going to be going on the title 9and various other paperwork related to the property) of a piece of property that my father owned. How will that impact my credit score? If it’s just being transferred to me, will it make a difference? Or do I have to actually buy the property for it to matter?
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It’d only matter, I think, if the property has a mortgage with an outstanding balance on it. If your father owned the property free and clear, and you’ve inherited it, then it wouldn’t show up on your credit report. The credit report only takes into account things like mortgages, student loans (or other installment payments), and revolving accounts like credit cards.
A bank or other institution might get information on the property if you were applying for a loan, since it’d be an additional asset that they could go after if you default, but it wouldn’t affect your credit score if you have no mortgage on it. If it does have an outstanding mortgage, I think that’d transfer to you (unless the estate pays off the mortgage and then transfers it), which would mean you’d essentially have a new account opened on yours. You might take a minor hit, but if you keep up with your payments, it probably would sort itself out relatively shortly.
There’s other tax implications (although I think if it was passed to you as an inheritance you avoid some of that stuff), but I expect you’re in touch with an accountant and/or estate lawyer on that issue anyway. Good luck!
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I agree with D.
Just having property transferred to you or being on the title won’t affect your credit score at all. Your credit score relies largely (no one has ever revealed the exact composition of how credit scores are calculated and there’s nothing you can directly do to affect it) on issues of credit you’ve been issued (all lines, including student loans, signature loans–if anyone can get them anymore–mortgages, and store or credit cards) and your payment history on all your bills. Just “buying” the property wouldn’t matter unless you took out a loan to buy it.
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I thought I’d supplement D & LostSailor’s comments by adding that there are 2 main criteria for calculating your credit score. 1) Age of loan/revolving credit account/mortgage, etc. & 2) The amt of the loan balance as a % of the original amount of the loan (or credit limit, in the case of plastic).
I’ve become somewhat of a minor expert in this topic, as I’ve refinanced my place a few times, and I’ve asked questions when my credit score has gone up or down. The objective is to keep the same credit accounts and pay them down as low as possible while keeping them open. For example, the ideal situation would be to get credit cards when you finish college and keep those same accounts throughout your life. As your credit limit rises for being a good customer and you maintain low balances (or ideally even pay off the balance every month), your credit score will go up a lot. If you refinance real estate, unfortunately, you sacrific a little in this regard, as you are getting a new loan + you might take out some equity and boost up your outstanding balance ratio, but if everything else is in line this shouldn’t hurt you too much.
Please don’t think that all of a sudden getting a bunch of plastic and paying it down will help. It will actually mess you up, as opening a flurry of new revolving loan accounts will mess up both criteria I’ve noted above.
Just food for thought.
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My name is going to be going on the title … of a piece of property that my father owned. How will that impact my credit score? If it’s just being transferred to me, will it make a difference? Or do I have to actually buy the property for it to matter?
Buying or owning real property does not affect your credit score. That makes sense, since a credit score is (supposedly) a measure of how you use credit, and assets are not credit. OTOH, if you were to take out a mortgage to get the money to buy said property, that would affect your credit score, as would your payments on said mortgage over time.
Note that a HELOC counts as a mortgage, so it might be worth the effort to get one of those. That would allow you to consolidate any other debts you may have with a lower interest rate, and even if you have zero debt it would boost your credit score. Do keep one credit or charge card open, but pay it off every month; close everything else.
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Debt can be good if used wisely. It is better to have good credit than no debt because eventually you will need to apply for a mortgage, a student loan or a credit card. Having a long and good credit history will mean you can get a loan and at lower rates.
I always have some debt, which I pay off without incurring any interest and on time. My wife has no debt. Her credit score is a 100 points lower than my credit score. She always pays her bills. it is just she doesn’t have a long history nor a variety of debts. We are applying for a mortgage and the rate is going to be higher than if I apply for the mortgage myself because her credit score is lower than mine.
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bringing up a credit score any time before things are serious is a deal breaker. without question. any woman that would ask about this is classless. the fact that this was a story in the nyt and asked about here goes to show, again, that romance is dead. too bad.
Hot debate. What do you think?
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The story from NYT is about a man asking a woman her credit score; either way, tacky.
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Unless one is entrusting their partner to jointly manage finances or prepare for a large investment (new home, car, business loan, etc.), I don’t think it’s ever a good idea to compare credit scores. That’s the only time they really seem to matter, so why bring it up at any other time?
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Assuming you’re involved with someone who appears to have similar spending habits, yeah, that makes sense. I’d think it’d be more of a problem when you’re talking about someone who’s maybe a bit more or less of a spendthrift than you may be yourself. Although I tend to think that, again, it ain’t about your FICO score, but rather your spending/saving habits. The FICO score really only comes into play when, as you said, you’re making a big joint purchase.
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The only answer I’d give if someone I was dating asked me about my credit score would be “It’s great and also none of your business.” Same thing about debt.
Unless a relationship has progressed to the point that you’re seriously considering merging households or finances in a long-term relationship or marriage, it’s simply none of anyone else’s business. If any woman doesn’t like my answer, she knows where the door is.
That said, I don’t know the exact number of my credit score, since it’s been several years since I’ve had it checked. But the reaction of leasing agents and landlords upon checking my credit score has been to forgo waiting for the full credit report and moving on to signing a lease, so whatever the number, it seems to be fine for my credit needs, which are small.
I came out of my marriage with debt that I went to great lengths to pay off as soon as possible. But that’s my business. Not my date’s…
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Just as a side note, the three credit reporting agencies have programs that let you monitor your credit on an ongoing basis, and provide alerts when something changes. They usually let you check the specific agency’s own credit score and report as many times as you like, and let you do all three once or twice a year (in addition to your required-by-law free annual report). They usually aren’t too expensive for the basic monitoring package.
It’s not a bad idea to check your credit periodically, so you don’t end up with any rude surprises. Years ago, I was switching cell carriers and was told that I’d have to provide a $1500 deposit to get a phone with a then-$70 monthly fee. I went back home, checked my credit, and found that someone else’s data had somehow migrated onto my report, probably via identity theft and such. I’m talking like wrong SSN, wrong birth date, living in locations I’d never lived, etc. I got all the info taken off (which is actually pretty easy nowadays) and my score returned to what it should’ve been (which was fine). Since then, however, I’ve kept tabs on my credit just to make sure nothing sneaks back on.
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I do get my free annual reports from each of the big three, but they don’t include credit scores. I did have a monitoring service for a couple of years after I divorced, but that was free as part of a class-action settlement I was only vaguely aware that I was involved in. So far, I’ve been lucky that there have been no irregularities to correct…
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How important is someone’s credit score to you? Is it a determining factor or do you consider other issues like spending habits or how much debt they do/ do not have?
It never occurred to me to ask someone’s credit score prior to it being mentioned here. I’d have trouble merging finances with someone with a substantially lower score for practical reasons, but their financial problems would likely become apparent on their own long before that, so it shouldn’t be a surprise.
Debt is not inherently bad; what really matters is net worth–particularly whether it’s positive or negative. Education, housing and durable goods are usually good debt, assuming you borrowed a reasonable amount in the first place, because they’re long-term debts matched by long-term assets. Most other things are usually bad debt, which means that you’re paying for them after the asset or service is consumed. I’d be concerned if someone had a lot of bad debt; that’s a sign of trying to live beyond your means, and bad debt generally has a much higher interest rate, so it becomes a vicious cycle.
Not only that, but I’d be more concerned with whether or not they live within their means and seem responsible with their spending than a credit score.
I agree, and that’s why I focus on financial stability rather than income. If they’re living within their means, whatever those means may be, that’s fine with me. I’ve worked my ass off to have a stable life (and that’s not just financially), and I won’t be inviting anyone into it if it looks like they’ll undo all that hard work.
While the credit score often reflects someone’s spending habits and money management ability, many times it doesn’t accurately reflect the strides someone has made to become more financially responsible.
Indeed. Mistakes hang around on your credit report, and affect your score, for a long time. For instance, I forgot to put my mortgage check in the mailbox once, four years ago, and that will hurt me for years. There’s a medical bill from over ten years ago that went to collection even though they never even sent me a bill, and even though I have a written statement from the hospital saying it was a mistake, the credit agencies refuse to remove it from my report. Now have “excessive” inquiries due to checking rates with multiple banks about refinancing my home. None of that says anything about my money management abilities, but my credit score doesn’t look as good as it should despite having a huge net worth and living on a small fraction of my income–and many people are in similar situations.
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I think I saw this article in the NYT recently.
In any event, there is good debt and there is bad debt.
As the to specific question of good credit vs. no debt…well how about plain financial solvency vs. something else? I’m sure that other posters have pointed out the pro’s/con’s of each, as well as the reasons.
But if this was one of the first questions that popped out of their mouths, I would politely ask if they would mind if I did a lexis search on them….
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I think the most important thing is for the person to be aware of their financial situation and to be working towards improvement–if the situation needs improvement. Many of us have and/or will fall on hard times, that doesn’t make us a bad person or necessarily irresponsible people, it just means we have some work to do.
So I would be more concerned with how a man his handling his situation–is he trying to pay off his bills, has he cut his expenses, is he trying to improve his credit score, etc.–rather that what his situation looks like at this particular moment. His attitude and handling of the situation are the most important factors in how I would respond to him.
I’ve also been deemed “too poor” to date, so I can understand how hurtful it feels to be rejected on the basis of lack of financial stability.
http://www.beyondblackwhite.com/money-considered-relationship-material/
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I struggled with bad credit for a while. It hurt me in ways far beyond dating. Its amazing how much it can negatively effect your life. I went through Lexington Law and got my credit fixed, and now my life is so much better as a result. Anyway, if you have bad credit I suggest giving them a try.
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Unless it’s strategic debt that the person has the assets to cover and can pay back tomorrow if necessary, I would not marry someone with a large debt (I don’t care if it is “good debt”). f we are just dating or living together (unmarried), then as long as,they can cover their bills without assistance from me, it’s not really my business.
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