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When Good Credit Is Romantic: Your Credit Score May Affect Your Love Life

By FINRA Staff

Can your credit score predict how long your relationship will last? The answer may be yes, according to a study published by The Federal Reserve.

There is a clear correlation between credit scores—generally a number ranging from 300 to 850 that is used by creditors to predict how likely an individual is to pay back a loan on time—and relationship stability, according to the study.

When there is a large gap in the credit scores of two individuals at the beginning of their relationship, the relationship is more likely to fall apart, according to the analysis of 15 years' worth of data from the Federal Reserve and the credit rating agency Equifax on more than 49,000 couples. In fact, couples who began their relationships with a gap of 66 points or more are 24 percent more likely to break up within two to four years.

"A big difference in credit scores between you and your spouse definitely is a bigger indicator of getting divorced in general than staying married," said Jessica Hayes, one of the researchers behind the report.

Part of that correlation between credit scores and relationship success can be attributed to the fact that couples with a large gap in credit scores are also more likely to maintain separate versus joint credit accounts, to have more difficulty acquiring new credit and a higher chance of experiencing financial distress, according to the study.

In fact, couples with joint accounts are about 80 percent less likely to separate over the following two years, according to the report. Hayes said that might be in part because a joint account is another way to make a couple more entrenched, since a joint account is just one more factor tying the couple together.

But credit scores may impact a more fundamental, essential element of relationships: trustworthiness.

Credit scores "are connected to a level of trustworthiness that affects your relationship," said Hayes. When you open a joint account with your partner, "you've trusted this person enough to get a joint account with them," Hayes said.

No one who has seen a relationship fail due financial discord likely will be surprised by the study's findings. That includes Andra Watkins, a Charleston, South Carolina-based author.

Watkins said her first marriage ended in divorce after five years, thanks in part to her ex's "binge spending" — a habit that landed him a credit score that trailed Watkins' above-average score by 250 points. Watkins found love again and while she didn't make a point of checking her then-new husband's credit score, she was happy when she learned it differed from hers by just 10 points.

"We both believe we should pay our debts, and we pay our bills on time. To me, both things measure how trustworthy a person is," said Watkins, who will celebrate her 14th wedding anniversary with her second husband this summer.

The success of Watkins' second marriage might be no coincidence, as the study also found that higher average couple scores are also correlated with relationship longevity. The fact that Watkins and her second husband both have above-average scores gives them a high average score, and researchers found that the higher a couple's average credit score, the lower their chances of separating within the first six years of their relationship.

Among the study's other findings:

  • People tend to form relationships with partners whose credit score is relatively close to their own. The average difference in credit scores among couples in the study was 69, while the average difference in scores between randomly-matched individuals was 150.
  • Credit scores between partners who have been together for more than four years tend to converge over time, with gaps shrinking from an average of 55 points to 22 by the end of the fourth year of a relationship. The study's authors attributed the change to "shared financial behaviors."

While credit scores may not be the most romantic thing to discuss this Valentine's Day, it could be the first step in a fruitful conversation, and your relationship may thank you for it.

If you find you and your honey aren't quite on the same page, check out Keeping the HarMONEY Alive: When Investment Styles Collide.

Subscribe to FINRA's The Alert Investor newsletter for more information about saving and investing.


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