What your credit score says about your love life

By Luke Kawa
Updated October 3 2015 - 12:13pm, first published 11:15am
Forget romance: It's all about credit scores, according to the Fed's research. Photo: Jessica Shapiro
Forget romance: It's all about credit scores, according to the Fed's research. Photo: Jessica Shapiro

At the US central bank, the jury's still out on interest rate hikes and inflation trends.

But a new working paper from the Federal Reserve Board draws some conclusions that might help prevent your heart from deflating. At least you'll never look at "credit unions" the same way again.

Economists Jane Dokko, Geng Li, and Jessica Hayes presented their findings about the role that credit scores have in predicting the stability and potential longevity of a relationship that's starting to get serious.

The trio scoured quarterly data from the Federal Reserve Bank of New York's Consumer Credit Panel, including a "risk score" of an individual's probability of failing to meet their credit obligations in the not-too-distant future. 

"In light of the growing prominence of credit scores in households' economic and financial opportunities, we are interested in their role in household formation and dissolution," they write, noting that their analysis centres on the initial match in credit scores and quality at the time a committed relationship begins.

The start of a committed relationship is marked by the quarter in which two individuals who did not share an address begin to do so, and, for the purposes of this study, requires that they live together for a minimum of one year. Other filters were then applied to the data.

Here's a summary of their findings:

  • People with higher credit scores are more likely to be in a committed relationship and stay together
  • People tend to form relationships with others who have a similar credit score as them
  • The strength of the match, both in the headline credit score and its details, is predictive of whether or not a couple is more likely to break up for observable reasons pertaining to finance and household spending; and
  • Credit scores are indicative of trustworthiness in general, and couples with a mismatch in credit scores are more likely to see their relationships end for reasons not directly related to their use of credit.

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