Does a Joint Bank Account Affect Your Credit Score?

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By Sarah Watts
Updated on Tuesday 28 November 2023

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If you’re thinking of taking out a joint bank account, but you want to be 100% sure that your credit score won't change or be negatively impacted, this guide will help.

Below, we answer eight of the most frequently Googled questions about joint bank accounts and credit scores, like ‘does a joint savings account affect my credit score?’ or ‘are joint bank accounts a good idea?’

We also cover the following topics:

  • Joint bank accounts for married or unmarried couples
  • Opening a bank account with someone who has bad credit
  • If you can improve your credit score by having a joint account
  • Whether having too many accounts is bad for your credit rating
  • The rules regarding opening a joint bank account with an elderly parent

Joint bank accounts vs credit ratings: 8 FAQs

1. How does a joint bank account affect your credit score?

A joint savings bank account doesn’t affect your credit score, but a joint current bank account can. If one of you has bad credit, this can negatively impact the other’s creditworthiness when you open a joint current account together.

On the other hand, if one party of the joint current account has a good or excellent credit score and a joint bank account is managed well, this can help boost the credit score of the party with a less favourable credit rating.

Learn more: How to Improve Your Credit Score

2. Are joint bank accounts for unmarried couples any different to married couples’ joint bank accounts?

No. Joint bank accounts for unmarried couples are exactly the same as joint bank accounts for married couples and can be set up just as easily.

When setting up a joint bank account, it should always be remembered that each person is fully liable to pay off any overdraft or fees accrued on a joint bank account. So if there’s a contentious split in the future, you could be held liable for your ex-partner’s debt.

In addition, your ex could empty your joint bank account, in which case, you would struggle to get the money back.

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3. Should you open a joint bank account when married?

It can be beneficial to have a joint bank account when you’re married for the purposes of sharing household bills, jointly paying the rent or mortgage and to monitor spending.

However, having a joint bank account when you’re married is not expected of you or in any way necessary.

The cons of having a joint account are that in the event of a divorce, you could end up being financially responsible for your ex’s debt in your joint account (i.e. overdraft).

You should also bear in mind that a joint bank account can negatively impact your credit score should your spouse have a bad credit rating.

4. What happens if you open a joint bank account and one person has bad credit?

The disadvantages of a joint account (current not savings) are that if one party has bad credit, the other party is intrinsically linked to that bad credit through having a joint account with them (known as a financial associate). This could affect the other party’s ability to get credit, despite the other party having a favourable credit rating.

Conversely, if you open a savings joint bank account, bad credit suffered by one party will not impact upon the other because unlike current accounts, savings accounts are not recorded on credit files.

5. Can you build credit with a joint account?

Yes, you can improve and build up a lower credit score on a lower credit rating by having a joint account, but only if the account is managed well over a period of time. Equally, you could damage your credit rating by opening a joint account with someone who has a poor credit history.

Regularly paying bills or loans by direct debit is looked upon favourably by lenders so setting these up will help.

That said, it's always best to check before opening a bank account if using a certain banking provider will negatively impact your credit score.

For example, it was reported by The Telegraph that exclusively using a Monzo account damaged credit scores as Monzo were only reporting to one of the three main credit agencies.

However, Monzo is exponentially improving their contemporary online banking service and if you open a Monzo joint account, you can check your credit score in their app!

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6. Is it better to have a joint bank account?

Yes and no. A joint bank account is better for fairly paying joint loans and bills, and can also help you keep track of your spending.

BUT, if you have a controlling, penny-pinching partner who constantly nags you about overspending, then perhaps a joint bank account is best avoided!

Also, if one person has a bad credit score, this can affect your credit rating and if you fall out with the person you have a joint bank account with, you could end up solely reliable to pay off any debt accrued in the joint account.

7. Do too many bank accounts hurt your credit score?

No, you can usually have as many bank accounts as you like without hurting your credit score as long as all your accounts are well managed (i.e. not maxed out on overdrafts) and are not opened in quick succession, as doing so could hurt your credit score.

When you first open a bank account, your credit score will dip slightly, but it usually recovers fairly quickly. If you keep opening new accounts before your credit score has had a chance to recover, this will damage your credit score.

Also, if you’re switching bank accounts, you should make sure you pay off any overdraft in your existing account to avoid any impact on your credit score.

8. Can you open a joint bank account with an elderly parent in the UK? Are there joint bank account rules for this?

Yes you can, but there are joint bank account rules that can apply upon the death of a parent. Should a parent die and you have a joint account with them, you are responsible for half of the money in the joint account as regards income and/or inheritance tax. Conversely, if you accrue any debts or liabilities, your parent’s money will be at risk.

Before opening a joint bank account with an elderly parent, it’s always best to seek the approval of any other siblings who may be suspicious of this arrangement. This is because if a parent dies, the funds in a joint account can automatically pass to the surviving account holder unless there is a legal document, called a ‘Declaration of Trust’, that specifies a different arrangement (i.e. tenants in common).

Also, your elderly parent needs to be of sound mind if they agree to setting up a joint bank account with you, otherwise a Power of Attorney should be sought.

Another point for consideration is that if you add money to such a joint account, this could affect your elderly parent’s eligibility for certain benefits.

Whatever you decide, make sure you have enough information to confidently make an informed decision about whether to open a joint bank account or not. At Compare UK Quotes, we recommend comparing deals for joint bank accounts online before deciding which bank to open an account with.

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