Does Opening a Joint Bank Account Merge Credit Scores?

The good news for your credit score is that joint bank accounts do not require you to merge credit reports with the co-owner, but a joint bank account can still affect your credit score. Thus, you should only open a joint account when you have complete faith in a person to use it wisely, such as when you have a blood relation to the co-owner.

Identification

The credit reporting bureaus never merge credit reports, so opening a joint bank account cannot merge the reports of any consumers. The bureaus report accounts on multiple credit reports when consumers co-sign on an account, but this does not automatically happen -- not even when you use a joint bank account to pay on a loan.

Considerations

Couples that merge bank accounts often merge other accounts, such as credit cards. This too does not merge credit scores, but joint accounts affect both spouses equally. On-time payment on joint credit accounts, such as a mortgage, boosts the scores of both owners, or lowers their scores in case of default. Even if the owners on a joint account are not related, a joint bank account can negatively affect the owners. For example, if one owner withdraws everything from the account, the other party may not have the funds to pay monthly bills, which leads to default and a lower credit score.

Other Risks

Creditors can levy a bank account without the consent of either party when one owner defaults on a debt. The lender would have to file a lawsuit to obtain a garnishment order, but a bank levy can wipe out a bank account, which leaves both owners with less money to pay regardless of whether the garnishment order is for only one owner.

Tip

If you open a joint account with someone, keep only enough money to pay everyday expenses. Your bank may allow you to require any transaction over a certain limit require the signature of all owners. Also, monitor activity on the account through online banking. Even if you are married, consider having individual accounts and only co-signing a loan when it provides a lower interest rate.