Five tips if youíre considering joint finances
Romance can certainly play havoc with your finances. Almost a fifth of Brits (17%) have reported having seen theirs and their partnersí credit ratings negatively impacted by their relationship.
Experian research has found one in eight (12%) people saying they have been impacted by a current or former partnerís poor credit rating, while 5% admit that they have had a negative impact on their partnersí credit worthiness.
Yet it found that only 3% of people have ever filed a note of financial disassociation ñ a credit divorce in effect ñ which lets lenders know that a couple should no longer be seen as ëa coupleí. With 30% of divorced or separated Britons saying they didnít know what a financial disassociation is, the findings suggest that many in the UK may still be financially linked to others without even realising it.
How you become linked
When you share financial associations such as a joint account or a mortgage, your credit reports become linked - which can mean that when you apply for credit, lenders will see not only your credit report, but also the credit report that is linked to yours.
Addressing your financial circumstances and your credit history upfront together could save any nasty surprises later on, such as being turned down for credit you really need. For those whose relationships sadly end, itís important to ensure any joint finances are also separated to regain financial independence.
If the mortgage is the only remaining joint debt with your ex-partner and youíve lived apart from more than six months, you can still ask us to break the link between your credit reports. The effect of this will be to stop any information about your ex affecting your credit rating in the future - which can be a big step in moving forward.
Some key tips
Experian CreditExpert has five top tips for those considering joint finances:
1. I doÖ do I? - The first step in setting up joint finances is deciding if they are the right choice for you and your partner. To better understand the impact joint accounts could have on your future credit-worthiness, you will need to review your own credit report to get a complete overview of your own credit history. If you don't have one you can sign up to CreditExpert or order a one-off £2 statutory report ñ go to www.experian.co.uk for details.
2. Take your timeÖ- Take the time to review both your credit reports, ensure everything is accurate and up-date and if you dispute any information, contact the Experian customer service team, who will raise a data dispute and work to investigate and resolve the dispute with the lender in question.
3. Whatís your score? - Your Experian Credit Score is a guide that will help you understand how your credit history is likely to be viewed by lenders and will also help you both understand if one partnerís credit history needs a little work before any joint credit applications, such as a joint mortgage, are made.
4. A helping handÖ - If you have a less than perfect credit history, the Experian customer service team will help you identity ways in which you can improve your Experian Credit Score and the picture your credit report paints of your financial situation. Making little changes to improve your credit report can make a big difference; not only to getting credit, but also to the interest rates you could be charged.
5. Full disclosure - If your financial situation changes, make sure you keep your partner informed before it becomes an issue. If one or both have had trouble managing your finances and debts are a real struggle, get free, confidential advice from organisations such as Citizens Advice, the Consumer Credit Counselling Service or National Debtline.
- Content / Article provided by Experian ñ links to Experian CreditExpert are placed for promotional purposes -