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Financial Red Flags to Settle on Valentine's Day Before Getting Hitched

Financial Red Flags to Settle on Valentine's Day Before Getting Hitched
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By Tuesday, 13 February 2018 12:20 PM Current | Bio | Archive

Some 63 percent of men and 60 percent of women plan to settle down romantically this year with

A total of 7 percent of millennial women reporting saving money to buy a wedding dress and 14 percent of millennial men saying they are likely to purchase an engagement ring in 2018, according to a Propeller Insights study. That’s compared to only 11 percent of Gen Xers and Baby Boomers who say finding love is on their list of New Year’s resolutions.

“Many millennials are ready for that next big relationship, which means they’re also ready to start thinking about building their financial future with another person,” said Emily Brauer Gill, director of brand and communications with Varo Money.

Whatever the age or generation, debt experts say it’s important to include reviewing a potential partner’s credit report as part of a courtship that leads to marriage.

“If you are embarking on a relationship, the one thing people are looking for is trust so including a credit report in the discussion of a potential partnership is very important because you're going to be making some financial decisions that affect both of you,” said John Heath, directing attorney with Lexington Law, a legal firm that specializes in improving the credit report scores of their clients nationwide.

Without two stellar credit reports in a partnership or marriage, acquiring a home or new car can cost more immediately and in the long run due to higher interest rates attached to a loan or mortgage.

“The worst case scenario is that the behaviors that created a low scoring credit report will continue into the relationship or marriage and put the spouse with a high ranking credit report at financial risk,” Heath told Newsmax Finance.

A credit score lower than 700 is an indicator that an individual has a potential money or credit problem, according to experts.

“Scores will always be subjective because they're based on a person's spending habits but over 700 is where you can access good credit opportunities in what's called A paper,” Heath said. “Any score under 670 would cause me to question a potential partner’s spending or credit card habits.”

Red flags to look for in a credit report include:

  • Maxed out credit cards: If someone has maxed out their credit cards, their financial responsibility may not be developed enough to enter a partnership, says Heath.
  • Unresolved Court Judgments: “It means the person may have their wages garnished in the future, which means there may be barriers to their earnings coming into the relationship,” said Heath.
  • Bankruptcy: Credit counseling services are often used to avoid bankruptcy but where there’s been an actual court filing in bankruptcy court, it indicates an inability to avoid the consequences of mismanagement. “I would inquire as to what drove this person to file for bankruptcy because it’s a champion indicator of a bigger problem,” Heath said.
  • Charge Offs and Late Payments:“If there’s repeat instances where the loved one charged off a credit card balance or was late in making credit card payments of 30, 60 and 90 days, it means the person may have trouble consistently earning or may not be a good financial steward of their resources,” said Heath.

All is not lost, however, in circumstances in which love conquers any doubt created by a negative credit report as long as assets remain separate not co-mingled.

“The minute that you open a joint bank account, credit card or buy property together, the risk of joint financial responsibility, garnishment or a lien comes into play,” said Heath.

A bad credit report need not be a deal breaker if the person is willing to work with a credit counseling agency.

“Working with a credit counseling service means the problem that created a bad credit report is being addressed,” Heath said. “It’s a positive indicator because it shows the potential spouse is willing to try to handle their finances.”

In some instances, a bad credit score is only a matter of removing negative notations.

“We all have a story and in some cases that story is misunderstood,” said Heath. That’s where Lexington Law and other credit repair agencies can help a potential spouse who is a good catch despite having a bit of a past.

“We create an opportunity for our clients to correct mistakes and tell the story behind the mistakes that may show up on their credit report,” Heath said.

“We make sure credit reports are fair, accurate and substantiated, which can be a very time consuming and emotional process. While our clients concentrate on developing other areas of their lives, including romance, we bring convenience by tying up loose ends on their behalf."

Juliette Fairley is an author, lecturer and TV host based in New York.

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All is not lost, however, in circumstances in which love conquers any doubt created by a negative credit report as long as assets remain separate not co-mingled.
financial, red, flags, valentine’s, day
Tuesday, 13 February 2018 12:20 PM
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