Unlike many commentators, I tend to think credit scores are a good thing. In a big world, it is difficult for large financial institutions to figure out the most import "C" of the four Cs of Credit -- Character. Credit scores offer an imperfect but generally useful shortcut in what is often an anonymous world.
In my last article on the topic, I noted that in addition to lending, credit scores are used in renting, insurance, employment, and a wide number of other areas. One new place where credit scores could prove useful is analyzing a prospective spouse. An academic paper suggests the following:
- Birds of a feather flock together -- in general, people tend to enter into long-term relationships those with similar credit scores.
- Relationships with higher credit scores tend to last longer.
- Those with larger gaps in the credit scores have a higher probability of the relationship ending sooner.
Though the paper is more broad than marriage, I am going to shift over to marriage for the rest of this article. Why? Every now and then, I get called in to do marriage counseling, typically along with my pastor and fellow elders. Im not perfect, so my marriage isnt perfect, but it is very good.
Marriages tend to fail because the husband and wife disagree on goals or methods for the partnership that they have entered into. Common disagreements and problems involve:
- Children -- number, methods of raising
- Lack of companionship -- shared goals, responsibilities, etc.
- Bad communication patterns
- Sins that need to be repented of -- anger amp; abuse, adultery amp; related, laziness, substance abuse, disdain, lying, etc.
- And more -- there are more ways to get it wrong than to get it right, just as there are more wrong answers on tests than right answers.
Im only going to handle the money issue here, though laziness, lying, bad communication, and lack of clearly specifying and agreeing to goals play a large role in money problems. Going back to my earlier article on credit scores, you might recall that I said that credit scores were a moderately accurate measure of moral tendency on average. Quoting:
Honoring agreements that you have entered into is an important indicator of your personality. Those who do not repay are on average less moral than those that repay. Those that are net creditors on average made efforts that net debtors did not.
Credit scores are important. In a specific way, they measure your willingness to keep your word. Anytime you enter into a debt contract, you make a promise to repay. If you fulfill your promise to repay, you impress others as one of good moral character. If you dont repay, it is vice-versa, you appear to be of low moral character. (Note: I am excluding those that got hoodwinked by lenders that defrauded borrowers in a variety of ways. That said, if you can be hoodwinked, that says something else about you, and that may have an impact on your creditworthiness as well.)
Now, before I continue, these concepts work on average, and not always in particular. I have helped some at the edge of society with gifts and loans. In some cases there is a cascade of bad events that the most intelligent would have a hard time facing. Being wise helps, but there are some situations that would tax the soul of anyone, and be difficult to claim that they were blameworthy; its just the way things happened.