Is Bad Credit Destroying Your Relationship?

Bad credit can stay on your record for up to 7 years. That’s longer than many relationships!

Have you noticed more arguments over money creeping into your relationship? If so, you are not alone. The complexities and uncertainties of COVID-19 have affected our security when it comes to how we live our lives, how we work and even if we have work.

Everyone has been disrupted in some way by this situation, meaning we have found ourselves having to navigate new problems, whilst potentially aggravating existing tensions, putting relationships to the test.

Financial stress is the no. 1 cause of relationship breakdowns

Relationships are challenging at the best of times, so it is only to be expected that living under COVID-19 restrictions has taken its toll. Money troubles are one of the key factors in relationship breakdowns, add the stresses of a global pandemic and recession to the mix and it may look like it’s time to start calling it quits.

But it’s not all bad news, if we’ve learnt anything in recent months it’s how important our friends and family are to us when everything else is so uncertain. As we come out of this situation and start to wonder if this is the new normal and what our future financial situation might look like, it’s time to have that, sometimes difficult but important,
money conversation with your partner. Money talk can be challenging, but it can also strengthen a relationship.



If you’re planning to make a significant joint purchase, such as buying a home, the first thing you need to know is your credit scores. While being in a relationship doesn’t affect your credit, if you jointly apply for a credit card or home loan, both your credit scores are checked. If you, or your partner, has a low credit score, this could mean:

  • You are unable to take out a joint rental agreement on a property.
  • You are unable to put both of your names on things like power, gas or internet bills, meaning the other partner will ultimately be accountable for them.
  • You are refused a joint personal account.
  • You are refused any type of mortgage borrowing.
  • You have to turn down a mortgage or personal loan because the interest rates the lender offer are too high for you both to afford to pay back.
  • Your partner can also affect your credit score. Whilst credit reporting agencies keep separate credit scores for spouses, the actions of your partner can still impact your credit score. If your partner goes on a shopping spree with your joint credit card, you are both responsible for repaying the debt. If you can’t repay the debt, it will affect your credit score as well as your partner’s.

On average, women have higher credit scores than men

In 2008, at the height of the global financial crisis, a study by Relationship Australia found financial stress contributed to one in three relationship break-ups. And communication difficulties were a factor in 37 per cent of break-ups.

If financial stress is affecting your relationship, here are 5 things you can do to tackle it:

Make a Money Date

When times are tough, it is more important than ever to work together as a team and support one another, but timing is everything. So set time aside deliberately, when you’re not likely to be interrupted, for the two of you to discuss financial issues such as the budget, savings and retirement.

View it as a respite from your busy schedule by making a date out of the occasion. Talk about what it\ is that is worrying you the most and why. Be respectful of one another, try not to interrupt and avoid blaming either yourself or your partner for your current financial situation. Make money dates a regular occurrence to ensure both of you are focussed on meeting your goals and sharing your progress.

Set joint financial goals

Setting a joint plan for your money can be the best way to get comfortable talking with it. Come to your first money date each with a written list of what you value most in life and use these lists to identify common goals that you can jointly work towards, that align with both your values. Maybe you both want to ensure your children have access to the best education, or you’re both interested in travelling more, or you’re dreaming about a beach retirement.



Consider setting some short-term goals such as saving $5,000 for your joint emergency fund and increasing them as you grow in confidence and get more comfortable planning your future financial freedom together. Start with an enjoyable easily achievable goal like saving for a joint weekend away without the kids.

Be open and honest

Having a money problem can be an extremely stressful and isolating experience. Trying to deal with the situation on your own by keeping it secret will probably only make the stress feel that much worse.

If it is you who has a debt problem which you are hiding from your partner, tell them about it as soon as you can. The sooner you have the conversation, the easier it will be. If you discover that your partner has been hiding debt it is normal and understandable to feel angry. However, now isn’t the time to release that anger. Instead, you need to be practical. Ask your partner for all the facts and figures and find out the exact damage. If your partner is afraid of your reaction, they are more likely to hide things from you, and vice versa. Sit down with your partner and plan, as a team, how you will prevent debt from becoming a problem in the future.

Things you could ask each other:

  • who you owe money to
  • how much you owe
  • the interest rates you’re paying.

Being judgemental is only going to make the other person shut down.

Take Action

Now that you have agreed on some common goals and know your current situation, it is time to put together an action plan. Start off by conducting a review of your cashflow for the past three months. Make sure to factor in all of your bank accounts, loans and credit cards, both personal and joint. Get free copies of your Credit Reports to check you haven’t missed any debts.



Create a realistic budget together based on the future you both want. When you know what you spend your money on, you can work out where you can spend less or identify those extras you can do without – directing any additional money into paying off your debts or saving for a goal. Make sure you write all decisions down so you both are clear on what was agreed.

Seek support

It’s perfectly understandable if find some problems are beyond your knowledge or abilities to solve. If you are struggling with bills and debt a good starting point can be to have a chat with a financial counsellor– it is a free and confidential service available to everyone (1800 007 007).

We are also here to help. As debt solution experts, Fix Bad Credit offers personalised, tailored credit repair and debt solutions to help you take back control of your money and start on your journey towards financial freedom for you and your family.

If you’re ready to take back control of your finances, get in touch with one of our expert, knowledgeable consultants for a FREE, NO OBLIGATION chat. After we have assessed your unique situation, we will provide you with a range of clear and easy to understand options, leaving it completely up to you to decide what option you wish to pursue. Remember that reaching out for support is a sign of strength and resourcefulness.

B M Peachey

B M Peachey, has over 15 years of experience investing in property and the stock market, in both New Zealand and Australia. She has a post-graduate degree, with qualifications in Finance and Mortgage Broking and in Accounting and Bookkeeping. She is passionate about ensuring people have access to credible, reliable, and easy to understand information to help them get in control of the life they REALLY want to live.

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    Disclaimer: The information in this article is general in nature as it has been prepared without taking account of your specific objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.