6 Secrets About Joint Credit

Want to be legally joined in life? In most cases, you need a marriage license and a ceremony. If you're lucky, you also have witnesses, music, a cake, some flowers, a few gifts and a nice meal afterward.

Want to be legally joined in debt? Just sign on the dotted line. No dresses, no tuxes and not so much as a cupcake for your trouble.

Before you enter into the world of joint credit, it pays to know a little more about what goes on behind the scenes, from how potential lenders view the debt to who is ultimately responsible for paying it -- and how it impacts your credit score.

[Related: Is Dust on Your Credit Card a Bad Thing?]

As with marriage, a lot depends on who you choose as a partner.

"The most obvious thing is to really be careful about who you open a joint account with," says Anthony Sprauve, spokesman for FICO, the company that pioneered credit scoring.

"If the other person disappears or flakes, you're going to be responsible for that debt," he says.

So before you fill out that next credit application, here are six things you should know about joint credit:

No. 1: There's more than one type of shared credit.

People throw around the term "joint credit," but they don't always understand what it means.

"I don't think people understand the extent of their liability," says John Ulzheimer, president of consumer education for SmartCredit.com. "If you're a co-signer or co-borrower, you're liable."

There are three different kinds of shared credit (and sometimes both consumers and lenders will use slightly different terms.) They are:

Joint credit: You are a full partner on the account. You filled out or at least signed a credit application for a card or loan. The credit account or loan has your name on it, and the money or credit is yours to use.

What you might not know: You are responsible for 100 percent (not 50 percent) of the bill.

Authorized user: You can use the credit, but you have little or no responsibility for repaying it. You didn't fill out or sign an application. The credit account belongs to someone else, and that person receives the bills and has given you charging privileges.

What you might not know: If the  account holder doesn't pay, some lenders will at least try to collect from you for the purchases that you made, says Chi Chi Wu, staff attorney with the National Consumer Law Center.

Co-signer: You are signing to be responsible for the entire bill, but the loan or credit account is in someone else's name and you can't use it. That other party will also be receiving the bills, and you may or may not have access to account information.

What you may not know: If the borrower defaults, pays late or misses a payment now and then, that bad behavior can be included in your credit history and sink your credit score.

[Related: Steps to boost credit score when a mortgage is the goal]

Another fun surprise: Parents co-signing for an account for someone less than 21 years old "may be liable on the account after the child turns 21," says Wu. A smarter strategy: Make a child an authorized user on a parent's account, she says.

What you should know before you sign: Lenders include co-signed debt with your total obligations when you apply for credit in your own name. So you may be scuttling your own ability to get credit -- even if the co-signed account remains in good standing.

No. 2: Joint debt flies solo on your credit report.

There's no such thing as a joint credit history.

When you marry, you still have a separate credit history, but any debts you've applied for jointly will be included in your file.

What you may not know: The entire debt is listed in your history as yours. To play fair, your spouse gets the same treatment.

Ditto your credit score. "There's no such thing as joint credit score," says Sprauve. Joint accounts "will impact each of [the individuals'] credit scores."

That's great news if it's an account for a card with a $10,000 limit neither of your ever uses. That will boost both your scores. Not so great times two if one of you is maxing out the card every month or missing payments. That will drag them both down.

Also worth noting: it doesn't matter who makes the charges or who pays the bills, whatever good or bad behavior is associated with the account, it goes on your credit report and impacts your credit score.