Little white financial lies can lead to marital strife

Embargoed to 0001 Tuesday January 4
File photo dated 15/06/06 of credit cards, as nearly a third of credit cardholders plan to shift debt between cards during 2011 to take advantage of a lower interest rate. PRESS ASSOCIATION Photo. Issue date: Monday January 3, 2011. Around 31% of people with outstanding credit card debt said in a survey that they plan to transfer an average of £1,015 between plastic this year, and just over half of them will do so during the coming three months, according to high street bank Santander. See PA story MONEY Card. Photo credit should read: Martin Keene/PA Wire ENGNNL00120120627182011 — Embargoed to 0001 Tuesday January 4 File photo dated 15/06/06 of credit cards, as nearly a third of credit cardholders plan to shift debt between cards during 2011 to take advantage of a lower interest rate. PRESS ASSOCIATION Photo. Issue date: Monday January 3, 2011. Around 31% of people with outstanding credit card debt said in a survey that they plan to transfer an average of £1,015 between plastic this year, and just over half of them will do so during the coming three months, according to high street bank Santander. See PA story MONEY Card. Photo credit should read: Martin Keene/PA Wire ENGNNL00120120627182011

And while full financial disclosure is not always necessary for a happy relationship, the research also shows that some significant financial truths are being withheld which could have serious implications for both partners.

Among those who found their partner was hiding financial secrets from them:

· 29% found their other half was hiding credit card debt;

· 25% loans and overdrafts; and

· 21% missed bill payments.

Poorly managed debt can potentially have a long-term impact on a couple’s finances – particularly if they are among the 36% of Britons who have joint credit agreements.

When couples’ finances become linked through joint financial agreements – such as a joint bank account or a mortgage – their credit reports become linked. As a result, if one partner has a less than perfect history of managing money and repaying debt, it could negatively affect the chances of both getting credit in the future and at the best rates. In fact, of those surveyed, one in 10 has had to postpone taking out a joint credit agreement – such as a joint mortgage – because of their partner’s credit score.

But the impact is not purely financial because being economical with the truth can have a big impact emotionally also. More than a quarter of couples (27%) admit they argue over money, with spending the most common cause of rows (51%). And more seriously, some 7% of Britons have broken up with their former partner over money matters.

Interestingly, the research also revealed that British men are the biggest secret spenders, admitting that they would happily spend an average of £344, compared to women’s £265, without discussing with their partner. And while men are more likely to fudge the truth when talking about how much they have spent socialising or on hobbies, women have been found trying to hide how much they spend on clothes.

Julie Doleman, Managing Director, Experian Consumer Services, commented:

“It takes a while for any couple to feel comfortable enough to discuss their finances. However, if you are planning a future with the person you love, financial honesty is important. Understanding the impact of your past spending and borrowing habits will help you see the way forward to realising your aspirations, be it buying a home or even starting a family.

“Sitting down together and checking both of your credit reports will give you a good overview of your current financial situation, and will help guide you in making any improvements necessary before you might need to apply for credit in the future. Taking the time to understand how you can improve your credit scores now could make a big difference to your bank balance in the future.”

If you think you might be a secret spender, Experian has the following advice:

1. Don’t panic: Remember, no two people are the same and we all have been guilty of having a little splurge every now and again, even if we know we shouldn’t. The question is whether your financial secrets risk hampering your shared goals for the future?

2. Take control: Whatever your financial situation, it’s yours to control. Understanding your spending, savings, debt and how you can achieve your future goals will help you get on the right track for the future

3. Understand your past: We all have a financial history. How you have managed any debt you have had in the past has an impact on how lenders will look at applications you make in the future. Your Experian credit report will show your credit history for the last six years, including a summary of money owed and also the positive and negative factors that are affecting your Experian Credit Score

4. United, apart: If your partner is a saver, and you are a spender, joint financial arrangements may not be the answer. If you have joint financial accounts, your credit reports will become linked which could possibly damage you / your partner’s chances of getting approved for credit in the future – and at the best rates

5. Plan for your future, together: If debt or your credit history is the problem, there is light at the end of the tunnel. Credit reports generally only look back six years and lenders will usually give greater weighting to your most recent behaviour. Speak to the credit experts and get as much advice as you or your partner needs to improve the picture your credit reports paints of you both