Does It Hurt Your Credit to Put Another Person as a Joint Card Holder?

Adding someone to your credit card account as a joint holder may help her build credit, but it could end up damaging your credit rating. Giving someone joint holder status does not have an immediate impact on your credit but can affect it. Thus, it is safer for your credit score to help a person obtain credit on her own rather than give her access to your account.

Identification

Letting someone co-sign your account does not affect your credit. Instead, it may affect the co-signer, because all of the history on your account transfers to his credit report. Adding a joint account holder may improve your credit rating if the co-signer helps you make on-time payments and pay down the balance on the account, according to Experian.

Risk

At the same time, allowing someone to co-own your credit card is extremely risky for your credit rating, because the other party may misuse the account. For instance, a maxed out credit card can cost you more than 45 points. If the co-signer runs up a high balance and you cannot meet the minimum monthly payment, the default can drag down your score by over 110 points, and the missed payment stays on your credit history for seven years, according to Ellen Cannon of Bankrate.com.

Considerations

You must repay the balance on a co-signed credit card regardless of how the co-borrower uses the account, because you agreed to share liability for the debt when you added the co-signer. The creditor will report late payments on the account, even when a judge orders the co-borrower to pay the bill. A civil judgment and collection account -- common results when you do not repay a debt -- on your record are one of the worst items you can have on a credit report.

Tip

You can help someone acquire credit and reduce the risk to your finances and credit score concurrently. For example, adding someone as an authorized borrower builds his credit history, but he has less authority over the account, such as not receiving the bill or changing account settings. If someone just wants to make electronic purchases, he can purchase a prepaid debit card at most retailers. Credit cards secured by a deposit and department store accounts tend to have the most scant requirements of any type of credit card.