12 February, 2010
Australians in love face the prospect of financial ruin if they fail to do their homework on their partners past before signing on the dotted line for joint credit obligations.
Many couples believe combining their finances will help them move up the financial ladder however, they fail to check their partners credit history or consider the consequences they could incur should the relationship end. These costs include ending up liable for their ex's debt or with a black mark on their credit report, which can make it harder or more expensive to access credit in the future. Negative events (such as defaults and bankruptcies) are listed on a credit report for up to seven years.
With Valentines Day fast approaching Dun & Bradstreet (D&B) is warning consumers to do their due diligence before they leap into a financial partnership. Research conducted for D&B by Newspoll reveals that almost nine in ten (86 percent) Australians have never ordered a copy of their credit report even though they are legally entitled to do so. With such a low number of consumers aware of their own credit profile it is unlikely that many Australians are aware of their partner's credit history.
Australians that have not / have ordered a copy of their credit report
Christine Christian, D&B's CEO, urges couples to talk about their finances before they sign on the dotted line.
"With Valentines Day fast approaching it's a good time to remind Australian's of the risks and consequences which can result from joint credit commitments," said Ms Christian.
"For many, the costs of combining finances come as a shock and they come at a time when an individual is already facing personal hardship. This means people are hit with a double whammy of a relationship break-up and a poor credit record.
"So although talking about finances can put a dampener on Valentines Day, the consequences of not doing so could have a long lasting negative impact."
Couples need to be aware of the legal obligations they are taking on when they sign a joint credit agreement regardless of whether it is a credit card, mortgage, personal loan or some other form of credit. If an individual signs a joint agreement, they are jointly liable for the payment. This means if either party cannot or will not pay, the other person will be liable for the payment under the terms of the contract.
The other important message is that couples should put themselves in a position to understand exactly what a lender will see when they apply for credit. This will allow consumers to find out whether recent credit applications will make it look like they have taken on too much debt, or if previous late payments are listed on their credit file potentially making it harder or more expensive to get credit.
"Even before an application form for a new account is completed, couples should be aware of whether or not their credit history will likely impact their chances of gaining access to affordable credit," said Ms Christian.
"If couples don't take these steps prior to applying for credit they may find themselves with credit products that are more expensive than they expected. This is often a result of information on their credit report which they could have known about before applying for credit."
Consumers can obtain a copy of their personal credit report for free by visiting www.dnbcreditreport.com.au
Download D&B's guide to managing your finances Print Version.pdf (256KB)
For further information please contact:
Danielle Woods
D&B Corporate Affairs Manager
T: 02 8270 2926
E:woodsd@dnb.com.au
About D&B
D&B is the world's leading provider of business-to-business credit, marketing and purchasing information and receivables management services. D&B manages the world's most valuable commercial database with information on more than 150 million companies.
Information is gathered in 193 countries, in 95 languages or dialects, covering 186 monetary currencies. The database is refreshed more than 1.5 million times daily as part of D&B's commitment to provide accurate, comprehensive information for its more than 150,000 customers.
The Australasian operations were bought out by the senior management group in August 2001. It was the first MBO of a wholly owned subsidiary in D&B's history worldwide.
Today Lazard Carnegie Wylie owns an approximate 90% stake in DBA and the local management team a 10% stake.
Strategies for future growth include developing DBA's commercial and consumer credit referencing business; expanding its receivables management outsourcing business; maintaining its lead in the development of unique credit and risk scoring products; and developing new products specifically tailored to the Australasian market. DBA currently employs over 500 people in Australia and New Zealand.
