When your credit is less than stellar and you’re dating someone who has their financial business in order, it doesn’t come into play until you realize things are getting serious and your finances might affect each other.
Then there is that one problem — you would rather do almost anything than discuss your credit score with anyone, especially your lover.
I have a credit repair company, and I actually see a lot of people looking to boost their scores for this very reason.
Here are some steps to navigate life when your credit or debt is worse than your partner’s:
1. Fess up. But first, start by pulling your credit report and see what’s really going on. When the time comes to talk to your partner, know the situation that you’ll be presenting, so that you can be practical and constructive. (Maybe it’s not even as bad as the shame makes it feel like it is!)
2. Know your options to reduce your debt. A) If your debt load is something you can chip away at and pay down by being more frugal in your day-to-day life, and/or by earning some extra money, then that’s an ideal action to take.
B) Another route is to get a debt consolidation loan, where you borrow a lump sum to pay off all your credit cards, and then you only make the payments on that loan.
3. Consider credit repair. Credit repair presents some options as well. If you’ve just got high credit card debt, unless you have defaulted, credit repair can’t help you. But if you’ve got things that can be negotiated, like late payments, anything in collections, accounts assigned to your ex in a divorce decree, or if you have been a victim of identity theft, then credit repair is worth considering.
4. Ask for support. Whatever your choice is, get your partner on board and explain how they can support you. Explain your situation honestly. Something to the effect of, “Honey, when I was in my twenties, [or got divorced, got sick, etc.] my credit took some hits. I’m in the process of getting out of debt now and repairing my credit, for my/our financial future. I’m not going to be able to go out as much, but I would love to have you over more for dinners in [or go on more walks in the park, take advantage of free museum nights, etc.].”
5. Don’t necessarily decline help. If your partner offers to help, don’t automatically say no because you want to be independent and show them how tough you are. If they are in a position to pay for more dinners or trips, accept their generosity with gratitude.
6. Keep it a business deal. If someone offers to pay all your cards off, do some deep soul searching about what kind of strings might come with it, and get it in writing, even if it’s that there are no strings. Keep it a business deal.
Tip: If you want the best credit score, pay the credit cards down over time, rather than all at once. If you’ve been making minimum payments and then suddenly make huge payments, you will probably get your credit limits slashed, which hurts your score.
7. Have a positive pay history. Ensure that you have positive pay history every month. If you’re still paying down credit cards, this will be no problem, but if you want the best credit score, don’t just quit using your cards (i.e. going 100 percent cash).
8. Check before you become an authorized user. If your sweetie offers to add you to a card as an authorized user, choose a card that has perfect pay history and has charges on it every month that get paid off so you get positive pay history. An alternative to this would be if you were an authorized user on someone's card, but don’t actually physically have a card. Just be sure to review the charges and payments together so no one gets a nasty surprise.
No one is perfect, so there is no point in being ashamed about your bad credit — it is only one of the many things that make up who you are. Be honest and up-front with your partner about your situation and discuss together what the best steps are to move forward. Once this weight is off your shoulders and you have formulated a plan for eliminating your debt, you will be glad you did!
This is a two-part series. Look for next month’s, “How to Date Someone When Their Credit Is Bad.”
Cassie Price is a member of the DailyWorth Connect program. Read more about the program here.