According to Experian, one of the main credit scoring agencies in the UK, around 7 million people have found that a partner has affected their own credit score. Approximately half of these 7 million had already split up with their partner when their credit reports were affected. While this may be the last thing on your mind if you’re in a happy relationship, considering your partner’s influence on your credit score is very important.
Why does this matter? Well, if you want to borrow money, such as a loan or a mortgage, then you’ll need a good credit score in order to be approved. Some people have found that they can’t borrow the money they want purely down to the behaviour of an ex-partner which has badly affected their credit score. One in four of those who had been affected found it hard to get a loan because of their ex’s behaviour. This is, understandably, a frustrating and upsetting situation to be in. The last thing you want after splitting up with someone is to be reminded of them months later and for them to be effectively stopping you doing what you want, especially if the break up was a difficult one.
Thankfully, avoiding this is relatively easy, although if your break up is so bad that your ex has knowingly and deliberately sabotaged your finances, then it may become a lot more complicated. Although you may completely trust your partner, it’s important to have a good idea about their financial past and their habits before deciding to have a joint account or joint debts together. If they have a really bad credit score and you get a joint current account with them, then your score could be negatively affected as a result. This happens because you are shown to be connected to them financially, so their behaviour could easily affect your own. Similarly, if you have a mediocre score and your partner has a brilliant one, any joint finances could boost your credit rating up as you’d be associated with someone who has been responsible with their money.
The same thing happens when it comes to joint borrowing. If you take out a loan in both of your names, then you will both be liable to pay it back. However, if a loan is only in your name, and your partner pays towards it with you, then they could technically leave you with the debt and they wouldn’t have to pay it back by law. Some people have experienced really bad break-ups where their ex has deliberately racked up debt in their name and then left them with the bills at the end of it. You may not be able to imagine your partner doing this now, but you can never tell how anyone would react if it came to a hurtful break-up.
Try to keep your finances more or less separated while you’re establishing yourselves as a couple, and only borrow in joint names if you have to. If you’re not getting married or entering into a civil partnership, then you may need to draw up some kind of legal agreement, particularly if there’s property or a business involved.