Revealed: the true cost of a failed relationship

Almost one in five of us (17%) have had their credit affected by a partner’s poor credit rating, according to new research.

The research, from Experian, found that 12% had been negatively affected by a partner’s credit rating, and a further 5% admitted that their own poor credit rating had impacted their partner. The research also found that only 3% had ever filed a note of financial disassociation after the end of a relationship.

A financial disassociation is like a financial divorce; it lets lenders and companies know that you are no longer to be considered a couple, and prevents your ex-partner’s poor credit rating from affecting the amount you can borrow. This is important because, if you take out any financial products as a couple - such as a bank account or mortgage - your finances become linked. Worryingly, 24% of people had never heard of financial disassociation, meaning that many may still be linked to ex partners without realising it.

A fifth of those affected said they believed that they had found it more difficult to get a mortgage because of a partner or ex-partner’s poor credit rating. In addition they felt that, once they did get a mortgage, they were offered a poorer rate of interest for the same reason.

Peter Turner, Managing Director at Experian Consumer Services, commented on the findings:

“Talking about finances can be an uncomfortable subject for many but setting up joint finances can be one of the biggest commitments you can make in a relationship. Few of us will have a perfect history of managing our finances but by addressing your financial circumstances and your credit history upfront together, at the very least you could save any nasty surprises further down the road such as being turned down for credit you really need.

“For those whose relationships sadly end, it’s important to ensure any joint finances are also separated to regain financial independence. If the mortgage is the only remaining joint debt with your ex-partner and you’ve lived apart from more than six months, you can still ask us to break the link between your credit reports. The effect of this will be to stop any information about your ex affecting your credit rating in the future which can be a big step in moving forward.”