A Cosigner on a Bank Account Vs. a Joint Holder on the Account

A parent is often a cosigner for a child's account.

A parent is often a cosigner for a child's account.

Any time you sign up as a cosigner or joint holder on an account, you're lending your credit score and reputation to anyone else on the account. Your credit score may help establish the account, and you may be held accountable for any debts owed on it. But, while some responsibilities are similar, the duties of a cosigner and a joint holder are very different overall.

Responsibilities of a Cosigner

A cosigner is someone who helps another individual establish an account with the use of his credit score and reputation. Young people opening their first bank accounts often require a cosigner in order to give them credibility with their banks. Also, people who have had difficulties with their credit may need a cosigner in order to open an account. A cosigner is a guarantor. With his credit score, he lends credibility to the account holder and helps to gain credit or account status. A cosigner may also be held responsible for any debts or other balances owed by the primary account holder. Typically, a cosigner does not have access to the account and isn't authorized to use the account or obtain account statements.

Responsibilities of a Joint Account Holder

An individual who joins with another to open and establish a bank account is a joint holder. A joint holder's credit score is combined with another's in order to establish credibility with the bank when opening an account. Married couples and families often utilize joint accounts to combine their finances and provide easier access to funds. Both joint account holders are held responsible for any debts owed on the account, and both individuals are authorized to use the account and receive account statements.

Types of Accounts

There are a couple of types of accounts that may have a cosigner or a joint account holder. Checking and savings accounts are often joint accounts, where more than one person has access to the account. These types of accounts may also require a cosigner if the account holders do not have adequate credit scores to be granted an account. Credit accounts may also have joint account holders. This simply means that the credit account has two or more names on it as responsible parties and users. A credit account is often established with the assistance of a cosigner, who lends his reputation and credit score for the account set-up. A cosigner may be held liable for any balances on the account, but she cannot use the account.

Credit Score Caution

You should always use care when becoming a cosigner or joint account holder. Any time that you join with another financially, either as a guarantor or account partner, your credit score can be irreparably damaged due to irresponsible or improper actions of another. Always use caution before putting your credit score on the line.

About the Author

Vicki Wright, writing and editing professionally since 1996, has extensive business management, marketing and media experience. Wright has a Bachelor of Science in socio-poltical communication from Missouri State University and became certified as a leadership facilitator from the Kansas Leadership Center in 2010.

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