The life and death vow of joint credit

Richard is the author of a soon to be released book called "What the Average Joe Needs to Know". He needed a headshot for the website and the other promotional materials related to the book. ©2011, Sean Phillips
Richard Moxley

By Richard Moxley

Your palms are sweaty, your mind is racing! Are you ready for such a commitment? It is the next step in your relationship, isn’t it? Even if the odds are against you, but your love is different … stronger!

Right? If you have been in a serious relationship or are planning to, you will relate to the thoughts and concerns mentioned above. However, I am not talking about marriage;  I am referring to joint credit.

How it can hurt

Having joint credit won’t automatically lower your score; however, it does increase your risk. As soon as you put your name on and sign an application, you are fully responsible for the complete balance and paying the minimum payment. The banks and lenders don’t care who spent the money, what it was spent on, who has it now, or what it is now worth. If they don’t get their money back as outlined in the contract you are both on the hook for everything. Even if everything on your credit is great, one collection or one bad account will cost you thousands in high interest and fees. You may even be declined.

The odds are not in your favour!

What are the chances of your relationship ending? I’m not generally a big fan of “what if?” questions but it’s important to weigh risk when it comes to personal finance. It doesn’t matter whether your relationship status is boyfriend, girlfriend, common law, partners, or even married. What are the chances of your relationship ending? Most stats give you around a 50/50 chance. If you are a hopeless romantic or really in love then I’m sure you will give yourself a higher chance of success.

Here is the hard cold truth. There is a 100% chance of your relationship changing. When I talk about joint credit most people assume I am talking just about separation or divorce but there is another “D” word that most people don’t want to think about.

The other “D” word

It doesn’t matter if you are in a relationship with your soul mate — death is still guaranteed. You cannot have a joint account with someone who has passed on. As soon as the bank finds out that one of the applicants is deceased you now have to close that account and apply for a new credit card, line of credit, or loan. If all your established credit is held jointly, you will have to start rebuilding your credit all over again if your spouse passes away.

Joint credit alone doesn’t hurt your credit but you need to know how the scoring system works so you don’t end up in trouble. My advice is to make sure you have built individual accounts if possible to limit your risk and protect yourself from having to start rebuilding your credit later on in life. For more free tips on credit you can visit my blog, If you would like to attend a free event to learn more about the other rules of credit visit our events page.

Richard Moxley is the Author of the book, The Nine Rules of Credit – How to Start, Rebuild, and Always Maintain Great Credit. He is also the founder of Richard has shared his credit expertise with financial professionals and the Average Joes across Canada and the U.S. His vision is too teach all Canadians the rules of the “Credit Game” so they can play the game to win!

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