Can your new date lead to bad credit?

Manage Your CreditWith Valentine's Day approaching, your thoughts might turn to buying a little something or lavishing extra care and attention on your Valentine to show how you feel.

As Cupid dusts off his bow and arrow, are you still at the daydreaming stage or doing your darndest to proactively manage the arrival of true love's first kiss? Perhaps you've been there, done that and have the kids or even grandkids to prove it.

Regardless of your romantic status, it's still exciting to receive those Valentine gifts, especially the ones you weren't expecting. If you're searching for ideas for Valentine's Day and really want to go for the wow factor, you can't go wrong with flowers and diamonds. Take the flawless 12 carat emerald cut diamond bought by Donald Trump for Melania Knauss or if antique is more your style, the 10 carat marquise cut diamond that Catherine Zeta Jones received from Michael Douglas.

In both cases, the diamond rings, each set in platinum, set their owners back a cool 2 million dollars. Not many of us can afford such luxuries from our checking accounts and even a modest diamond would require many years of saving. In reality, most of us buy jewelry and other high ticket items and gifts on credit, but what happens when your Valentine date has bad credit?

Bad credit doesn't mean poor dating choices

25% of Americans have bad credit. Is your date one of them and how would you know? Few relationships begin with "How's your credit rating?"

When we meet someone for the first time we like to create the right impression, to act and dress in a way that we think our date or new partner will like. It's not always appropriate to pop 'the question' right at the beginning!

The credit rating of your new partner will not affect your own credit score because at the start of any relationship your finances are independent and separate. But if you suspect your partner does have a bad credit rating there will be tell tale signs, including:

  • Calls from debt collection agencies
  • Letters from collection agencies
  • Spending habits that suggest your partner is living beyond their means

If your relationship is serious and likely to go any further, now is the time to bring up the subject of credit reporting. Finances can be difficult to discuss and if you find the subject becoming too emotive, you could each check your credit score as an open and transparent way to bring your financial history to the table.

Poor credit, your partner and you

We all have baggage and financial baggage is difficult to hide, especially when relationships deepen and marriage and living together become topics for discussion. If you discover your partner has a poor credit rating don't be too quick to judge as a poor rating can be a result of many factors and not necessarily due to poor money management.

Life is full of unforeseen circumstances, and much like Cupid's bow, they can strike around any corner. Some contributors to overextended credit include:

  • Illness
  • Pressures of a growing family
  • Redundancy (losing job)
  • Difficulty finding work

If your partner has made late or missed payments, is running credit cards close to or over their limit, it is likely that they will have a poor credit rating. Interestingly, a poor credit rating can also arise when there is little evidence of credit history or purchases or when identity theft can affect an otherwise good credit score, something that credit monitoring on a regular basis can help prevent.

Moving past bad credit to happily ever after

So you've moved beyond your Valentine's Day date, the dizzy rush of first love is a fading memory and you've settled in to a routine that involves taking turns taking out the garbage. You're talking about getting married or moving in together.

It's only when your finances are combined that your partner's bad credit rating will begin to affect you. Joint applications will be affected. You may find yourself being turned down on loan applications or being accepted, but on a higher rate of interest. But you can work together to create a solid credit rating.

The Valentine season can be romantic and exciting. If your budget doesn't stretch to two million dollar diamonds, handmade cards and cookies make great alternative gift ideas. You could even try your hand at writing your own Valentine's Day poem, and if your date does turn out to be 'the one', love can still conquer all, even a bad credit rating.


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