“We’re getting married!”
“Congratulations! When are the two of you sharing your credit reports?”
Chances are your reaction to this hypothetical exchange was along the lines of, “What?”, or, “Oh my God, you’re kidding me!”
Actually, I’m quite serious. We tend to view marriage as primarily a romantic relationship, which it certainly is. At the same time, it is a legal partnership and a business relationship.
Describing it this way is usually a pretty significant romantic wet blanket. Engaged couples tend to talk a great deal about their life histories, philosophies, goals, hopes, and dreams. In the midst of all this deep sharing, the one thing many of them find difficult to discuss is money. Yet full disclosure about each other’s net worth and debt, as well as beliefs and goals around money, is essential for building a thriving marriage.
Hence the credit report.
Suppose you go to your bank for a loan, perhaps for a home mortgage or to buy a car. Before it will approve that loan, the bank needs full disclosure of your employment, your earnings, your debts, your payment history, and every other bit of financial information that affects your ability to repay the loan. As part of the application process, the bank will obtain your credit report.
I think it would be a great idea for engaged couples to do the same. A credit report is tangible evidence of each partner’s history with money. It will disclose the debts you’ve had, loans you’ve received, earnings, spending priorities and patterns. It will reveal any outstanding judgments, past due bills, or late payments. And it will show partners each other’s credit scores.
A credit report alone is not a full financial disclosure. But sharing them can be a good place for couples to start that challenging “I’ll show you mine and you show me yours” conversation about money. Then you can go on to discuss other concerns: whether to merge everything or keep some aspects of your finances separate; your beliefs and habits around saving and spending; family money issues that might affect you and your spouse; employee benefit packages; career goals; and all the other financial facts and details that are definitely not romantic but are definitely important for a strong life partnership.
What do you do if your credit report isn’t the greatest? Chances are your first impulse would be to keep it hidden. You might well feel a lot of shame at the idea of revealing uncomfortable financial truths. If this is the case, my first suggestion is to respect that feeling. Shame over past mistakes and errors in judgment is normal; it doesn’t help at all to shame yourself for feeling ashamed.
My second suggestion is to take a deep breath, gather your courage, and have the conversation anyway. It’s probably just a matter of time until your partner finds out about this, so you’re wiser to handle it sooner rather than later. It’s also possible that your partner is feeling some shame around their own credit history, and the two of you can find common ground in learning from your mistakes and moving forward.
My third suggestion is to get some support—perhaps from a financial therapist or a trusted financial mentor—before you begin the conversation.
The money talk needs to be in depth, honest, and specific. Chances are it won’t be easy. If a partner refuses to share their financial information, that’s a huge red flag that there may be money issues you need to resolve before the marriage. Remember, you are joining each other in a partnership intended to last for the rest of your lives. Having everything financial out in the open before you say, “I do,” will greatly improve your chances of living happily ever after.
Check out The Financial Therapy Podcast by Rick Kahler