CIBIL: Does joint loan account impact your credit score?

livemint.com:

Having a joint loan is like a civil partnership. Joint loan accounts impact your CIBIL score in a number of ways. When a joint loan account witnesses good credit behaviour, it impacts the CIBIL scores of all the parties in a positive way. And when the joint loan account sees defaults on payments, the CIBIL scores of all the parties stand to suffer. 

Positive impact: Let us suppose the joint account is managed responsibly, wherein timely payments are made. It would have a positive impact on the CIBIL scores of all account holders. Thereby, positive payment history and responsible credit behaviour are reported to CIBIL, which can boost the credit profiles of all individuals associated with the account.

Negative impact: On the other hand, if the joint account entails defaults in payments, high balances, or missed payments, it can harm the credit scores of all parties involved. 

Late payments or defaults on the joint account will be reflected in the credit reports of all individuals associated with the account, potentially lowering their CIBIL scores.

ALSO READ: Set to get married? The new beginning may impact your credit score — here's how

It’s important to note that in India, lenders often consider the credit histories of all individuals associated with a joint account when making lending decisions, so managing joint accounts responsibly is crucial for maintaining good credit scores for all parties involved.

Each time you apply for credit, it triggers a hard inquiry that can temporarily lower your credit score. So, it is advisable to limit new credit applications, particularly if you’re planning to take out a significant loan soon.

It is advisable to have a mix of different types of credit accounts, such as credit cards,