When One Partner isn't Financially Honest

On the rare occasion, I meet a couple where one person has their financials in order - pays everything on time, perfect credit file, works hard, and likely has a spreadsheet for their spreadsheets. Then there’s their other half...

Recently I had this scenario. She works in finance, immaculate credit history, and fiscally responsible. He’s self-employed, doesn’t like paying tax (do any of us though?) - to the verge of pretending it's not a thing; and his credit file left much to be desired.

Sydney mortgage broker Camilla Baker discusses financial honesty, joint borrowing, and why transparency matters in relationships.

They were recommended to me for a refinance and a top-up, but it’s unlikely the loan will go through at this stage, due to his credit record.

This is where, as a broker, it gets awkward. Under privacy laws, I can’t discuss one person’s credit file with the other without permission - even if they’re married and both applying for a loan. In this case, he gave me permission to share the details with her, which was a relief. But had he not, I’d have been in a pickle. She’d likely be wondering why the loan wasn't moving forward at speed, thinking I haven't done such a great job, while the real reason - his credit history - is something I’m legally bound to stay silent about.

Honesty isn’t optional

Being upfront about your finances with your partner - and your broker - isn’t about shame. It’s reality. A joint application means both histories, both incomes, and both stories being told. You can’t hide one half of it and hope for the best.

If there are missed payments, tax debts, or credit issues, please tell us. Most of the time, there’s a way to work around it; or at least be prepared. We can’t fix what we don’t know.

Credit issues aren’t forever. In this case, he’s now taking steps to pay off that credit card and clean up his tax position. Six to twelve months of consistency and transparency, and we’ll revisit the refinance on a stronger footing.

Because in finance, as in any relationship, honesty isn’t just the best policy. It’s the one that gets results.

*Not financial advice, just suggestions to help you be prepared.