By: Ashley Feinstein
A recent study released by the Federal Reserve Board says that our credit scores are correlated to our love lives. You can read the full study here. Why am I so excited about this? If love isn't a reason to get your credit score up, I don't know what is!
Our credit score is often a reflection of our overall financial wellness so when you start saving, consistently pay down your debt and get your finances in shape, your score will rise. Many times, how we do one thing is how we do everything. People who are reliable and dependable in their finances are often the same way in other areas of their lives, including their relationships.
Here are some fun stats from the study:
A 105 increase in credit score implies a 32% less likelihood of separating. This is great news for people who have credit scores that are less than stellar. Increasing your score decreases the chance you'll break up with your partner.
Individuals whose score is 109 points higher have a 14% greater likelihood of forming a relationship in the next year. Single and looking? This is great news! Work to increase your score if you want to enter into a committed relationship within the next year.
Those with the lowest credit scores are about 30% less likely to form a committed relationship. On average, millennials have the lowest credit scores of any age group. This makes sense because 15% of our credit score is determined by our credit history. If you're younger, you've had less time to develop a credit history. People are also settling down in committed relationships later in life. Regardless, the overall theme stands. If you want to get into a committed relationship get your score up!
Interested in increasing your credit score? Here are some ways you can get your score up.
Pay your bills on time. 35% of your FICO score is determined by your payment history. Do you pay your bills on time? Make it easy on yourself by setting up automatic bill payments so you never make a late payment again.
Reduce the amount you owe. Another very important factor in your credit score is how much you owe. This goes into your credit utilization ratio or how much of your available debt you are tapping into. The lower the better. When you reduce how much you owe, your score goes up.
Leave your oldest accounts open. The average age of your accounts affects your credit score so when you leave your oldest accounts open, your score will remain higher. That being said, this isn't always a great idea. For example, if you are going to spend more because you have available credit, it might make more sense to take the ding in your score.
Build your credit. If you don't have much of a track record for the credit agencies to go off of, it might result in a low credit score. You can build this up by opening a credit card. If you are unable to do that, you might want to consider putting your name on a utility bill or opening a securitized card.
I'd love to hear what you think! From your experience, does your credit score correlate with how reliable and dependable you are in other areas of your life?
--
Ashley Feinstein Gerstley is a money coach and founder of Knowing Your Worth, where she demystifies the world of money and personal finance. Follow her on Twitter.