[sksk]

This is a very interesting study. Anyone who has worked in the consumer credit industry will know that credit scores are correlated with a whole bunch of things -- your standard credit default to insurance claims to employment. Anytime you need to identify 'responsible' individuals, credit scores can act as a pretty good proxy although using credit scores is legally kosher only in certain situations.

I think their trustworthiness hypothesis is probably weaker than other parts of their analysis. I have my own hypothesis based on my experience working in this industry: Staying in a committed relationship may not be really about 'responsible' behavior but could be due to similarity of financial management styles. Most marriage counselors talk about 'sorting out your finances' before getting married; credit scores are essentially capturing that issue -- people who have very good credit scores tend to be savers (although credit scores do not use income or wealth into account) and ones who have poor scores tend to be financially poor and for the large part spend more than they can afford. Also people with good scores tend to be manage finances in a particular way -- pay bills early, monitor balances regularly, etc. -- while the ones with poor credit scores do not usually pay much attention to finances and miss payments frequently.

When you have two people with two different styles of managing money, it can lead to a strained relationship and subsequently lead to separation.

[ap22213]

To me, it's simpler. You have people who 'believe' in the current system and their role in keeping it stable and sustainable. And, you have people who don't believe or just don't care.

I am unfortunately a believer. I've always wanted to disregard the whole silly, archaic system, but I can't. I'm very 'responsible' by nurture. My spouse is also a believer. We have a very stable relationship, we're very responsible, trustable, and, of course, have perfect credit scores all because of our silly beliefs.

[hueving]

>You have people who 'believe' in the current system and their role in keeping it stable and sustainable.

I'm not sure what you mean by 'believe' but it makes it sound like there aren't obvious, objective benefits to paying bills and having a good credit score. I don't like the system either, but it results in me not having to pay higher interest rates on loans, not having to put down large deposits for rent, getting to purchase things on credit, etc.

[pm90]

I think what contributes to separation is a feeling by one party that the other one is "not responsible" with money. As with everything else, they then have to make a choice: let that affect the relationship, or not. There is also the fact that if one party earns way more than the other, then its bound to affect the relationship, especially in modern societies which believe in financial independence as a pillar of personal achievement.

[danieltillett]

Does it help a relationship if you have two non-savers together? As you rightly point out, money problems are major cause of relationship conflict and breakdown, but are these less common if you have two reckless spenders in a relationship rather than just one? I would have thought that having two reckless spenders would just accelerate the process of hitting money problems.

[sksk]

That's a good question and I was thinking about the same when I read the paper. I have never investigated this aspect of credit scores in my career so don't really know the answer. My guess is people who have similar score, even if it is bad, probably tolerate each other more than when they have very different styles. I am not sure if the paper looks at this deeply (they seem to only compare differentials and stdev at formation).

[danieltillett]

The study could have answered this question, but they don’t seem to have looked at it. All their analysis is comparisons of couples with different scores, not what effect absolute scores have on relationship robustness.

My anecdotal experience is spendthrifts have a lot of relationship problems that are not helped by being with another spendthrift.

[sksk]

Agreed. You are probably right about the outcome. It is easy to just add an interaction of nominal score group (high, med, low) vs. mismatch/match and see if there is an effect.

At our startup we get depersonalized credit data but we don't have a nice panel like the Fed :) so cannot really do that analysis on our end. I would be nice if they released this data publicly -- once it is setup for modeling (with just a few variables), it is so hard to re-identify so the risk of privacy invasion is low. I doubt that will happen though.

[danieltillett]

If I were the authors I would be writing the follow up paper explaining exploring this - why write one big paper when you can salami-slice the data up into a couple of papers.