Your personal credit profile is a measure of individual financial health used by lenders and others interested in evaluating your creditworthiness. The information has personal value as well, highlighting moves you might make to improve your finances. Establishing and protecting a positive credit rating shouldn’t be taken lightly; it is an important building block of your financial foundation. Monitoring your credit keeps you on the right track, providing inspiration to protect a good score or improve upon a bad one.
Keeping up with your credit score gives you the same snapshot credit companies use to evaluate credit strength. But what if you’re linked to past financial difficulties that weren’t your fault? Unfortunately, mingling finances during relationships sometimes turns out poorly for even the most financially responsible people.
If you’ve been stung with relationship regret – and a bad credit score; you’re not alone. It is not uncommon for one partner to drag-down the other partner’s credit strength, either by way of ill-advised credit decisions or outright deception. A recent look at the widespread problem found a surprising number of individuals share tales of financial abuse with their debt advisers, shedding light on a serious relationship issue impacting Britons’ finances.
Financial Abuse Impacts Both Partners
If yours is like many UK households, you’re working hard to cover expenses and committed to making sensible spending decisions. The last thing you need is financial interference from an outside influence, beyond your control. According to debt advisors, that is exactly what happens to a significant number of Britons, as their relationship partners’ bad behavior muddles the financial waters.
There are lots of ways to ruin your credit rating. Failure to pay, especially cases leading to court actions, is a heavy blow from which to recover. Foreclosure and other forms of default are to be avoided at all costs, or run the risk of backsliding beyond repair. Carrying too much credit is another drag on your score, so it’s important to use credit wisely, when offered. For a substantial share of people, these rules go out the window, when their partners’ actions result in negative credit consequences.
How Prevalent is the Problem?
Twenty per cent of debt counselors reported first-hand stories of partners using another’s credit card without permission or forcing the partner with the stronger score to take out more credit. The study shared by the support charity, Relate, also pointed out 30 per cent of debt counselors often deal with clients whose partners have spent all their joint reserves. As well as 20 per cent of debt counselors reporting often working with individuals’ whose partners control access to their income, bank accounts, and savings.
When one partner loses control of joint finances, it can lead to the other acting unilaterally, outside the interests of the couple. As one partner spends too much, for instance, debt builds for both parties. In cases where one of the partners is consistently left in the dark, the damage is often done, before he or she can intervene. Things become particularly sticky when relationships subsequently fall apart. Under the law, both partners are responsible for shared debt, regardless of which one made poor financial choices. If balances go unpaid, both partners’ credit scores will suffer equally. In this position, you might end up repaying your partner’s debt, just to protect your own financial reputation.
Your financial association with a partner can be hard to unwind – even after the relationship has ended. The best outcomes occur when partners are willing to separate and equitably account for shared debt obligations. If your ex-partner refuses to cooperate, however, it can be a long road wiping debt and repairing your credit score.
It is thought education and training may help some individuals avoid the negative credit consequences of failed personal financial relationships. In the meantime, a substantial number of Britons remain vulnerable to credit inconsistencies caused by their partners.