Married couples, take note: Infidelity isn’t limited to just sex. Secrets about money can cheat you or your spouse out of household harmony.

According to research conducted by Jeffrey Dew, Ph.D., an assistant professor of Family, Consumer, and Human Development at Utah State University, couples who argue about finances at least once a week were 30% more likely to divorce than couples who argue about money less often. In addition, he says that the more consumer debt a couple has, the more often they will fight about both money and non-money related topics.

Add to that the possibility of one party’s indiscretions dragging down their significant other’s credit score, and you’ve got a complicated credit love triangle.

Lying and keeping secrets about cash flow is, in fact, disloyal behavior. In fact, say many, financial infidelity is the new adultery. Here, experts warn about how money can make a marriage go very, very wrong.

Price-tag fibs

Lying about purchase prices – though common – can be a major marriage no-no. “The main reason people do this is to avoid fighting about it. It’s short-term avoiding the hassle traded for long-term destroying the marriage,” says Tina B. Tessina, Ph.D., a psychotherapist and author of “Money, Sex and Kids: Stop Fighting About the Three Things That Can Ruin Your Marriage.”

Socking funds away

You may say it’s for a “rainy day,” but maintaining money that your spouse doesn’t know about is – say it together now – sneaky. Hiding things like a bonus you received at work, a savings account, or risky investments may cause your spouse to lose trust in you once it all comes out in the open (and it usually does). “This leaves your spouse to wonder what other secrets you’re keeping from them,” says Brad Klontz, Psy.D., co-author of “Mind Over Money: Overcoming the Money Disorders that Threaten Our Financial Health.”

Hiding purchases

To avoid telling your spouse that you spent a big wad of cash – or more likely maxed out a credit card — on a luxury, or to purchase an item and hide it is an epic fail. That’s because your credit mishaps can damage your credit score, which in turn can affect your future (and your spouse’s!). And don’t think that buying something new and making it look old to fool your spouse isn’t just as bad, Klontz says.

Spending marital funds on addictions

Using your money to support an addiction, be it to drugs, expensive clothes, gambling, shoes or toys — you name it – is harmful to a marriage in more ways than one. Often, people with such addictions will even take cash advances on credit cards or forge a spouse’s signature on a credit application, a surefire recipe for marital and credit score disaster.

Racking up credit card or loan debt

Irresponsible spending is untrustworthy toward your spouse whether the account is joint or single – even if you didn’t open the account behind his or her back. Your indiscretions can wreak havoc on your credit score, which in turn can cause you to be denied for a mortgage or car loan application, and more.

Loaning or giving money to friends or family

Tessina warns against giving sizeable amounts of marital money – more than $50 – to a child, relative, or friend without discussing it beforehand with your spouse.

Thinking money can be a substitute for love

A study co-authored by Jason Carroll, Ph.D., an assistant professor at Brigham Young University in Provo, Utah, concludes that materialistic spouses are about 40% more likely than non-materialistic spouses to believe that there are problems in the marriage. “They start to see their marriage as a means for having that kind of lifestyle and providing that kind of materialistic living; if that’s not what’s happening, sometimes that can be interpreted as a flaw in the marriage,” says Carroll.

The Solution: Money Talks

No matter which of the above sins is the culprit, the pricey fact remains: Disagreements about money are the number one cause of marital conflict and the top reason for divorce during the first three years of marriage, according to Klontz. “Money is taboo to many people and rarely do couples talk about it,” he says. “Each partner has his or her own set of values about money and [chances are] slim that both have the same beliefs.”

What’s more, many couples often learn about money misdeeds after being denied credit or receiving correspondence from debt collectors. To keep things honest, it’s good for your finances – and for your relationship – to request a copy of your credit reports and share them with each other at least once a year. That way there are no surprises and you can work together to overcome financial struggles.

Although financial infidelities can be damaging to a marriage, there are ways to regain trust. Tessina recommends regular financial meetings. “Don’t expect to be able to discuss finances successfully while you’re on the run, when it’s late at night, or while watching TV,” she says. Make a date for discussing finances and take the time to sit down together and discuss your needs, wants and means.

If one spouse is materialistic or likes to spend like there’s no tomorrow, a mutual agreement can help get finances on track – and a credit report will keep everyone honest. “They might work toward determining what their fixed expenses are and set up a separate account for that amount of money to be deposited monthly,” says Colleen O’Donnell, a Certified Financial Planner for Lincoln Financial Advisors in Dallas, Texas.

After agreeing to a percentage of the excess that should be devoted to savings, the remainder may be used as discretionary income. Or, specify a dollar amount that either can spend without answering to the other each month. One spouse may choose to spend a little each week while the other makes one bigger purchase each month.

“You may not think of your marriage as a business deal, but a huge part of it is just that,” says Tessina. Marriages — like some businesses — are called partnerships, and there is a reason for this. “Just like a business, a marriage takes in income, pays expenses, and is supposed to have a little profit (savings) left over.” Couples can avoid financial blowouts with regular sit-downs about money, and putting all their credit score cards on the table face-up for the other spouse to see.

Financial Infidelity Is the New Adultery is provided by Experian.com

Photo: wallyg

Painting: The Story of the Recorded Word, Edward Laning

Forget making changes to your credit card usage – it’s what you don’t do that can increase your credit score (or at least keep it from going south).

Just as you can’t buy happiness, you can’t buy a high credit score – the only way to get one is to demonstrate financial responsibility. “Creditors don’t care about how many millions you may have in your investment account, it’s how you use your credit,” says Maxine Sweet, vice president, public education for Experian.

Steer clear of these 10 things experts say can mangle your score.

1. Thou Shalt Not Avoid Using Credit. If you don’t use credit, you won’t have much of a credit score. “A credit score is an important tool companies use to protect themselves,” Sweet says. The lower the score, the higher the risk, and this can affect whether or not a loan is approved.

2. Thou Shalt Not Miss Payments. Paying a bill late will hurt your credit, but missing a payment will damage it even more. “If you do so, you can’t make it up,” Sweet says. In other words, making two payments in the next billing cycle will not remove the blemish from your credit history. Whether or not you pay your bills on time determines 33% of your score.

3. Thou Shalt Not Limit Loan Types. Despite what your bank account may think, a car payment and a mortgage may not be enough. Also managing an installment debt, such as a credit card, is a good indicator of credit savviness. There are five elements to the credit score model and revolving credit, which allows consumers to charge and owe different amounts each month, is one of them. “It’s 10% of the score,” says Gail Cunningham, vice president of public relations for National Foundation for Credit Counseling.

4. Thou Shalt Not Close Unused Credit Card Accounts. Actually, just use caution, says Sweet. A factor in credit score models is your utilization, which is your debt vs. how much is available. For instance, if you owe $4,800 on a card with a $5,000 limit, you’re using most of your available credit and this “utilization” will have a negative impact on your score. Counting toward 30 percent, your utilization is the second highest factor in your credit score. You should charge no more than 30% of your available credit, recommends Cunningham.

5. Thou Shalt Not Be A Credit Tease. Don’t run up charges all over town or apply for several cards at once while looking for the best rewards program. Recent inquiries means that you have accessed your credit and this can affect your score negatively. “This signals that you’re desperate for credit and don’t have enough cash available for your purchases,” says Cunningham. She adds that if you are shopping for a major purchase, such as a mortgage or car loan, the inquiries will usually roll together into one.

6. Thou Shalt Not Rob Peter To Pay Paul. Don’t charge anything unless you know how and when you are going to pay it back. One of the benefits of credit is the ability to spread out payments on a big purchase, not to delay paying with hopes that the money will come in – from somewhere. If you need to use a credit card for convenience, use a prepaid card or a secured card that enables you to make payments to your own line of credit.

7. Thou Shalt Not Get On The Call List. When a debt turns into a collection account, it’s an indication that you got yourself in hot water. Once a collection agency jumps into the arena, it becomes the owner of the debt, which will show on your credit history. Trying to make payments to the original debtor will not make the collection agency or the negative mark on your credit go away.

8. Thou Shalt Not Forget The Little Things. That library fine you didn’t pay or the health club contract you signed but didn’t honor can show up on your credit report. Any debtor has the right to report unpaid bills to the credit bureaus, and many of them exercise that right.

9. Thou Shalt Not Negotiate. On paying less than what you owe, that is. If you cannot repay a debt in full and a creditor agrees to settle for less than you owe, you haven’t won the battle. The transaction will be reported as a settled account and this will hurt your credit score. Instead of negotiating to lower the overall amount of the debt, ask to have your interest rate or monthly payment lowered so that you can continue to pay the debt off in full.

10. Thou Shalt Not Give Up. If you have late payments, missed payments, defaulted loans, and similar credit mess-ups in-between, don’t give up and think that your credit history is ruined. Although offenses like these generally stay on your credit history for seven years, the recovery clock doesn’t start ticking until you have one full month of paying all of your debts on time, says Sweet.

Provided by FreeCreditReport.com, a part of Experian. -
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