How to Treat Your Financial Profile Like Your Tinder Profile
Have you ever worried about what a potential romantic partner might think about your financial standing? Have financial issues ever caused issues between you and your romantic partner? If you answered “yes” to either of those questions, you’re not alone! In fact, money is a leading cause of relationship strife, often being cited as a reason for divorce. Plus, according to findings by Finder.com, 72 percent of Americans said they would reconsider a romantic relationship because of the other person’s debt.
However, according to Experian’s recent consumer survey, only 31 percent of people believe that their financial profile will show them in a good light. Furthermore, 51 percent of people don’t think they know enough about their own financial profile. In contrast, more than half of Experian’s respondents feel as though their social media and online dating profiles show them in a positive light. This is in large part due to how highly curated online profiles are.
Why Does Your Financial Profile Matter?
I mentioned that a large majority of people would have second thoughts about entering into a relationship with someone who has debt. I don’t necessarily agree with that sentiment, but it’s something to consider if you’re looking for a longterm relationship. However, there are other reasons why this should be important to you that go beyond romantic love.
Credit worthiness: Your financial history will determine whether or not a lender wants to front money to you. This applies to credit card companies, mortgage lenders, personal and student loan providers, car companies, and more. If your credit history looks bad, these lenders can decide not to give you a loan at all, which can limit what you’re able to do with your future.
Interest rates: If you do get approved for a loan, the interest rates on that loan will vary depending on your credit history and credit score. Depending on the size of the loan, this could cost or save you thousands of dollars. The higher your credit score, the lower your interest rate.
Origination fees: Sometimes, if you take out a loan, you’re not just paying for the loan itself and interest. There is often an origination fee added on top of it. Your credit score and credit history can determine the rate of that fee, which can save or cost you hundreds or even thousands of dollars.
Employability: I don’t agree with this, but some employers pull your credit history when considering you as an employee. If you have a negative history, this might cause you to be denied for a job. I used to work with someone who got turned away when he was going from being a contractor to a full-time employee because of an old credit card bill he never paid.
Getting an apartment: More and more landlords and property managers are checking credit before they allow you to move into a new place. Having a good credit score and a positive credit history, to lenders and people like landlords, means you’re more trustworthy. So if you have negative marks on your credit report, they may turn you away.
How Can You Curate It More Like Your Online Profiles?
Make It a Priority
Recognize that your financial standing matters for your own stability and security. It’s not about what you “should” or “shouldn’t” do, it’s about protecting yourself in the long term. It’s not something that you can continue to ignore, because it will affect you down the line. It will determine what you’re able to do and the opportunities that you have. So put it at the top of your priority list!
Pay Attention To It
You need to pay attention to your financial profile in order to be able to fix it at all. You can’t fix what you don’t know is broken! Your first step should be to pull all of your financial information into one place. That might mean opening a Mint account, or it might mean just making a spreadsheet. Having all of that information in front of you will help you to understand exactly where you’re starting from. It will help you understand what changes, if any, need to be made.
Next, you should be checking your credit score monthly. There are so many free options out there now, like Credit Karma or Credit Sesame. Chances are, you bank or credit card company also offer your credit score for free. Your credit score indicates whether or not you are trustworthy to lenders. If you’re planning on applying for a loan in the near future, you’ll want to know what your credit score is so that you can get to work to improve it, if necessary. And no, checking your credit score doesn’t hurt it!
Finally, check your credit report three times a year! All three credit bureaus are legally required to provide you with one free credit report each year. That means that you can get three credit reports each year (one from each bureau). I like to space them out and pull one every four months from a different bureau. Go to annualcreditreport.com to get your free credit report. This is important because your credit report is your actual financial history. It’s what influences your credit score. All of the good and bad financial behavior in the past seven years will be listed on it. However, sometimes there are mistakes. Sometimes a bill that you actually paid will be erroneously sent to collections. Even more dire, sometimes someone will use your name to open fraudulent credit accounts. You wouldn’t necessarily know these things if you weren’t pulling your credit report regularly, which means that they could hurt you without you knowing.
The most important thing to do is to do something. If you realize that your credit score is lower than you’d like it to be, or you have more debt than you thought, it’s time to start doing something about it. It can feel overwhelming, so you should start with incremental goals. Put a debt repayment into place, contact the credit bureau about a mistake on your credit report, or hire a financial coach. You have more control than you might think, and you can start improving your financial situation today.
Do you feel more motivated to take care of your financial profile?
One way to get started on improving your financial circumstances is to sign up for Experian’s new, free Financial Profile. With this, you can see the type of information that lenders see, understand your full financial picture, and know who’s looking at your information. Plus, checking this profile won’t hurt your credit!