Joint Credit: Should You or Shouldn’t You?

When you are single and apply for a credit card, house or car, you are the only one responsible.  You are the one that affects your credit score…nobody else.

When you decide to marry, or team up with someone to apply for joint credit, there are some interesting dynamics you should be aware of.  Everything that occurs, good or bad, affects both of your credit scores.

1)            You are responsible for 100% of the debt incurred when you share a card.  So if your “partner” decides to bail, you will still be responsible for paying the debt, whether you personally spent the money or not.

2)            When you marry or have joint accounts, the actions that both of you exhibit affect both of your credit scores.  This is especially true in the lives of married couples.

3)            If you co-sign on someone else’s debt, and the default, YOU will be left with the responsibility of paying the debt, even if you never benefitted from what was purchased.

4)            For parents who co-sign for a child – say one who is starting college, this is especially troubling.  Parents would be better off making their child an “authorized user”.  This simply means that the child will have the ability to charge expenses on the card up to a certain limit set by the parents.  In this case, the parents can limit their liability.

5)            In the case of a married couple, given the 50%+ divorce rate these days, it may be better to keep most credit separate.  Perhaps only con-join your credit for a big purchase like a house.  In this way, the ownership and responsibility for the debt is never in question.  If you have everything joint, divorce court cannot help you.  Each of you is 100% responsible to repay the debts incurred…regardless of who ends up with the real property purchased.

If your credit score is suffering, you can get help.  Credit restoration specialists are at your service to help you decide some of these troubling questions.  They can assist you in cleaning up your credit history so your score goes up naturally.