Authorized user or joint loan


Whether you are married, in a relationship or alone, you will maintain your credit score. However, there are cases when you want to share your credit with another person.

If you want to share your loan, there are two main options – add a person as an authorized user to your account or take a joint loan. Let’s look at both options to make it easier to make a decision.

Add authorized user

Add authorized user

If you already have a credit line such as a credit card, for example, you can easily add a person to this account as an authorized user. In many cases, this can be done with the help of an online account in the bank where the account is opened. As a result, an authorized user will receive his credit card and access to your credit line.

The user himself will receive more benefits than you. Such an action is useful if your loved one does not have a credit history, or if you want to improve his position. Thus, if the loan is paid on time and without errors, the authorized user will receive positive entries in their credit history.
At the same time, such a person, having his own credit card, is not responsible for the return of funds. But the owner of the credit account is fully responsible for the money that he spends himself and for those that his “assistant” spends.
But, despite the increased risk of adding an authorized user, borrowers often use this service, and here’s why:

– Your child can improve your credit score. Reaching the age of 16 years, a teenager can use this banking service. Thus, it is possible to help him form a positive credit history so that he can more easily borrow in the future.

– Adding an authorized user can be useful if you often share the cost with someone . In this case, there is some sense to use this service. All your total expenses will be recorded in a single account, and you will be able to track the movement of funds. Most often married couples do this.
The account holder can also win in this situation. If the authorized user will responsibly treat your credit account.

Joint account

Joint account

Due to the fact that many lenders do not have the ability to add a joint account holder, it will be necessary to open a new one, initially designed for two people. This option may be useful depending on the situation.

First, opening such an account means that you are both equally responsible for repaying the loan. If you want a person to be completely fascinated by the “game”, by taking a joint loan, you have made the right choice.

By learning how to manage a loan together, you can also improve your communication skills. When you know that you have to give money, you often talk about money. Over time, this can help you better manage your finances.

This service, like the previous one, is far from being found in all credit institutions. Therefore, you may have to change the usual financial partner.

Just as in the version with an authorized user, you will still be on the hook. If the co-owner of your account is irresponsible to the loan, you will suffer no less than he. Therefore it is necessary to maintain the state of the account and make all payments on time.

Before you decide to share your credit score with anyone 

Make sure that the user will be responsive to their own and your general obligations. When it comes to your credit account you can never be too careful.

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