Understanding joint accounts vs. cosigning

Being in a serious relationship or partnership often means that you have to make important financial decisions together. This might include opening a joint account or cosigning, which are commonly considered in these scenarios. Knowing the difference between these can be beneficial to your financial knowledge and help you feel more empowered when making decisions. Here’s what you need to know.

Joint accounts

Joint bank accounts allow you to manage money that’s shared with another person. They can be a good solution where shared costs are involved, however they require strong trust between the two individuals. Mutual expenses that could benefit from a shared account include rent or mortgage payments, as well as utility bills.

Benefits include clear transparency of funds, as well as convenience, thanks to these payments being dealt with jointly from one account. They can help to simplify finances between a partnership. The disadvantages include a lack of privacy and possible impacts if one person has a poor credit history, as you’ll be co-scored.


Cosigning is slightly different. Here, an individual signs jointly with a borrower for a loan, which means that they have now the legal obligation to be the backup repayment source when it comes to a person’s debts or financial obligations. This reduces the risk for the lender and can make them more willing to allow the borrower to get a loan.

However, this does of course mean that the cosigner is subject to risks such as an impact to their credit score and is financially liable. Understanding the legal and financial obligations is crucial before cosigning with another person.

Key differences

While joint account holders share ownership, cosigners share responsibility. Both account holders can have their credit scores impacted when opening a joint account together. However, with cosigning, only the cosigner’s credit is affected.

It’s important to bear these differences in mind when assessing whether to pursue one route or another.

Making informed decisions

An awareness of how both you and the partner can boost your credit scores in the lead-up to a joint account or cosigning will help you gain more power over your financial security. While some focus on paying off debt and completing timely payments, others might look into opening an interest-free credit account that can help you boost your credit score. Knowledge is power when it comes to finances.

You should also pursue clear and open communication with one another, setting out expectations and responsibilities for potential scenarios you may find yourselves in. You should also enquire about your partner’s financial situation, as well as your own, before entering into these agreements. It might be that you want to encourage the use of alternative methods such as authorised users or establishing individual accounts instead.