How your credit score affects your love life

NEW YORK (Reuters) - In the high-stakes arenas of love and money (or credit scores), building on the latter may well gird the relationship, as Alida Almonte found.

Reality hit when the 33-year old communications manager started to think about buying a home with her boyfriend Jason Giannini, and found that neither of them had pristine credit scores. Indeed, out of a maximum of 850, both scored in the less-than-stellar low 600s.

So, in an attempt to secure better mortgage rates, they decided to have a "friendly competition" to see who could lift their credit scores the highest and the fastest.

Within six months of diligent bill-paying and trimming of debt, they both boosted their scores to the high 600s, and are now proud owners of a single-family home in Deer Park, Long Island.

"Nowadays, credit is part of your brand," says Almonte. "It is also part of your relationship, in terms of the life you want to build together."

Almonte may not have known it, but according to the Federal Reserve - yes, the stately U.S. Federal Reserve - things bode well for her relationship.

The Fed recently looked at the correlation between credit scores and relationship duration, in a working paper entitled "Credit Scores and Committed Relationships" by researchers Jane Dokko, Geng Li and Jessica Hayes (http://1.usa.gov/1PC9Ken). It uncovered some fascinating tidbits.

MONEY AND RELATIONSHIPS

First: Higher credit scores tended to correlate with being in committed relationships and staying together. Check one for Alida Almonte's credit boost. Second: People tend to form unions with partners with similar credit scores. Check two for Almonte.

What didn't bode as well: Having poor credit, or a credit score that was wildly different from your partner.

"We find that the couples' average level and the match quality in credit scores, measured at the time of relationship formation, are highly predictive of subsequent separations," according to the authors of the report.

Think it through, and those conclusions makes sense: A low credit score is a sign that you may be struggling with bills, and financial stress is never great for household harmony.

Also, having a totally different credit score from your partner likely indicates that you have contrasting approaches to money, also a potential indicator of marital strife.

Fear not, lovers: One credit snapshot does not represent your whole money story.

"We all come from different economic levels, and it is very rare for two people to come together who spend and save in the exact same way," says Bari Tessler, a Boulder, Colorodo-based financial therapist and author of the upcoming book "The Art of Money." "Credit is just one more thing to be worked through and negotiated."

SECRETS

In some cases, low credit scores might be clues to negative behavior, like keeping secrets.

"That could definitely affect marriage and longevity," Tessler says.

In other cases, stinky credit might simply reveal normal life transitions, like being laid off, raising a new baby or having temporary trouble covering the mortgage.

"That's just real life," she says.

Now here is the good news: Whatever a couples' respective credit situation, it is something you can work on together, even if, as the Federal Reserve data indicates, the odds may be against you.

"I have seen people with lower credit scores be disciplined, make a commitment, and raise it," Tessler says. "It is hard work, but we can change our money stories and patterns."

Part of that effort, of course, will be the dreaded Money Conversation. If you and your partner are wildly mismatched in your credit, there is no way of getting around it: You are going to have to sit down, open a bottle of wine, and discuss those differences.

It is never comfortable, but think of it as a pre-emptive strike to save your relationship, advises financial planner David Haas of Fair Lawn, New Jersey.

"If they have different money approaches - one person always paying bills on time, and the other not worrying about it or continuously spending beyond their budget - then it is important for the couple to come to terms with this together.

Otherwise, money and credit will be an area of strife which can break up the relationship, Haas says.

(The writer is a Reuters contributor. The opinions expressed are his own.)

(Editing by Lauren Young and Bernadette Baum)