How your ex can affect your credit rating

A new Experian CreditExpert survey of more than 3,000 Britons reveals that one in seven Britons (14%) have had a romantic relationship which had a negative impact on their financial situation or credit rating.

And while love can be blind, for one in three, it could pay to remember that it has taken an average of three years for their financial situation and credit rating to recover. One in seven (13%) are currently facing this as an on-going issue.

Yet only a fifth (21%) of respondents filed a note of financial disassociation: a credit divorce in effect, which lets lenders know that a couple should no longer be seen as a ‘couple'. A further third (30%) are completely unaware of what financial disassociation is or how it can benefit them.

Financial disassociation is not only a way of distancing yourself from a former partner who doesn't understand how to budget money – current partners may also file for it in situations where one partner's credit history is being affected by the other's.

Following a note of financial disassociation, those having issues with their current partners tend to have their credit rating repaired in an average of 9 months. For issues with former partners, credit ratings tend to be repaired within an average of 18 months.

Although a majority of people (57%) see joint finances as a cornerstone of a strong relationship, for many, money and love should not mix. 70% of survey respondents stated that they know – or think they know – all about their partner's money management history. A further one in six admit they have kept some of their financial history secret – rising to a third (33%) among those who have had financial issues with a previous partner.

One in four people (25%) are embarrassed about some aspect of their financial past, which may explain why a similar proportion (26%) believe in keeping financial matters separate. Of those who have been financially burnt by a partner in the past, this figure rises to 60%.

How the Ex-Factor can affect your current financial situation:

According to Experian research:

  • Almost half of respondents (47%) have had their credit core negatively impacted by a former partner's financial situation
  • A quarter of Britons (25%) struggled to get a loan as a direct result, and 18% believed they were charged higher interest rates when they were approved for a loan
  • Similarly, 19% found getting a mortgage more difficult with one in eight (12%) actually being turned down for a mortgage.

The emotional cost can be significant too. People whose partner or former partner's finances are affecting their current financial situation are more likely than the general population to worry about money (71% v 55%), to feel stressed about it (59% v 38%) and to dread opening statements (36% v 19%).

Having joint credit accounts with a partner or spouse is one of the biggest commitments you can make in a relationship. Financial ties, such as a joint mortgage, a joint bank account or a partner's name on a credit card, will be viewed on a credit report as an ‘association' to your spouse or partner. This association will stay on a credit report – regardless of whether the relationship has ended or not – unless a request to have it removed is made.

Research was carried out online by eDigitalResearch on behalf of Experian CreditExpert among a representative panel of 3017 UK adults in January/February of 2013. You can see your Experian credit report and get unlimited credit scores with a 30-day free trial of CreditExpert. Free 30-day trial for new members only. Monthly fee applies after free trial. Free trial period starts on registration – further ID verification may be required to access full service, which may take up to five days. To find out more about the effects of financial association, visit Experian UK's Facebook page, with videos, tips and questions answered.

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