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The Debt Talk: Discussing Financial Baggage, Marriage and Credit Scores
Updated: November 21, 2020 |
Taylor Kovar, CFP

Discussing Debt as a Couple, and Why It’s Important

April is Financial Literacy Month, and now is a great time to take on the scary side of finances: credit scores, money, and marriage. Understanding and talking about credit scores and debt is uncomfortable in every relationship, but taking it on together is key to a healthier, wealthier marriage.

Here’s a frightening statistic: the average credit card debt per household is $15,300. In many cases, to one half of the marriage, debt is okay and something you can live with. If the other spouse doesn’t feel the same way, however, this disconnect can end up slowly eroding, tearing apart, and eventually ending the relationship.

Do you and your spouse fight, argue, or play the passive-aggressive game about your credit card debt? Here is the good news: it doesn’t have to be that way! Getting out of debt together, with your marriage intact, is totally possible. The first step, of course, is to establish open, respectful communication between the two of you about subjects like debt, money, and marriage finances.

All You Need to Know About Credit Scores

In order to have a productive debt talk about money and marriage, you first need to know some background. This will help you get a clearer idea of where you stand and, with a little work, enable you to figure out how to get out of debt together.

In a nutshell, a credit score is a 3-digit number that gives banks and lenders a good idea of how well you pay back your debts. There are a couple of different credit score systems out there, but most of us use the FICO score. It ranges from 300 (really, really bad) – 850 (you’re a rock star). Here’s a quick breakdown:

  • 800+ = excellent credit (lenders love you!)
  • 600-750 = pretty good
  • 550-600 = low
  • Below 550 = poor

When Should I Check My Credit Score?

We recommend pulling your credit score about every 6 months or so to get a good idea of where you’re at (note: it can swing pretty dramatically, especially when you take on or eliminate debt). This includes checking on your partner or spouse’s credit score too.

Why Is Good Credit so Important?

Short answer: everyone’s looking at it! From insurance companies to banks and car dealers, everyone looks at your credit to determine how big of a risk you are. The better your credit, the more options you have.

What Hurts My Credit?

  • Late payments, including late medical bills
  • Large debts owed (maxed-out credit cards, for example)
  • Canceling credit cards

Having trouble? Don’t hide your head in the sand. Call your credit card companies, medical office, or anyone else with who you’re trying to get out of debt. You’d be surprised at how many options are available to you…but you have to take responsibility and make the first move!

I Have a Bad Credit Score. How Do I Improve It?

Having a poor credit score can be scary, but it isn’t permanent. Here’s how to get that number up quickly:

  • Pay off that debt. This is, hands-down, the simplest and most effective way to get a better credit score. When you do, remember that emotions can matter just as much as numbers do. Paying off high-interest debt first is the best strategy from a financial perspective, but paying off the smallest debt might be the better call, just because it feels better.
  • Keep credit lines open. Pay off your credit cards and keep them at $0 for at least 6 months (do not cancel your cards). Available but unutillised credit is important to your credit score number, so you want credit available to you that you’re not using.
  • Build good habits. Unless it’s a real financial emergency, avoid taking on new debt. Talk to your spouse about other alternatives such as cutting nonessential expenses or earning an additional income through a side hustle.

Talking about Debt as a Couple

Taking on credit scores and debt isn’t the most enjoyable part of a relationship, but it’s very important. If you’re getting married, take your relationship to the next level first by checking in on each other’s credit scores and debts. Lay your cards out on the table and spare no details; you need to be able to trust one another about money, and marriage without trust is kind of a non-starter. You will have to agree on what’s an acceptable amount of debt (you may need to compromise) and agree to a solid plan to get out of debt.

If your partner refuses to disclose their debt, credit card balances, and his or her credit score… run! This is financial infidelity and a huge red flag. Honesty about money and debt is critical to a successful marriage, and failure to do so can lead to an ugly, and probably expensive, divorce down the road.

How to Agree on Debt in a Relationship

Dealing with debt, whether you’re paying down credit cards or applying for a loan, is not just about the numbers. Emotions get involved and complicate even relatively straightforward decisions. Your respective money personalities are going to affect how you approach debt, and opposite money personalities are likely to disagree. The key here is compromise and understanding.

A Saver/Security Seeker may balk at the idea of getting a business loan, for example, but taking a calculated risk that their Spender/Risk Taker spouse can succeed at starting a new business could be the right thing to do.

Remember, having debt is NOT the end of the world. It doesn’t even have to be a bad thing. Tackle your debts together as a couple, collaborate on a plan on how to get out of debt together, and you will have a healthier, weather marriage.

How to get out of debt as a couple

The 4 C’s to Getting Out of Debt Together

When it comes to talking about money and marriage, whether this means your weekly money huddle or a serious discussion about taking on a mortgage, it’s usually better to have a kind of structure in place to guide your discussion and keep things on track. When you’re trying to figure out how to get out of debt, these four steps usually produce good results:

1. Confess

Sit down and discuss reality. That means sharing all those credit card balances that you thought would just disappear if you ignored them long enough! It takes a lot of courage, but you will feel a big relief once you do it.

2. Confirm the Amount

Double-check what’s real by calling the credit card company and getting the numbers right. If we don’t look at these numbers for a long time we forget how they GROW!! Get on the phone and get the raw hard numbers. You won’t regret it!

3. Calculate

This is where things start looking up! Use Google to find a free debt calculator that will help you and your spouse make a workable plan to get out of debt and get back on track! Take a few minutes while each of you separately think about (a) when you would like your debt paid off, and (b) how much that would take per month to do. It is important that you do this individually. Once completed, come back together and discuss your reasoning.

4. Compromise

Now that you know the amount that you have to pay off and how you want to pay it off individually, you can make a compromise with purpose. The couples who use this as an opportunity for growth are the ones that come to it together and don’t erode the relationship with any more passive-aggressive games.

Want to improve your financial literacy? Check out the other articles on our website for some free tips and tools. If you have any other suggestions on how to get out of debt together, let us and our other readers know in the comments.

As Always,

Taylor and Megan Kovar

The Money Couple

To better understand each other’s views on money, take our FREE Money Personality Assessment today! Or, follow us on Facebook for awesome news, articles, and more!


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