How financial associations affect your credit profile

A financial association is a link between two or more people who have shared financial accounts or products. This includes joint bank accounts, credit cards, mortgages, and loans. 

Financial associations can affect your credit profile, as their credit history may also be taken into account when lenders make credit decisions. If a financial associate has a ‘poor’ credit profile, this can affect your ability to get a loan.

Creating financial associations

Financial associations can form through the following methods:

  • A couple who have a joint bank account and mortgage
  • Two friends who have a joint credit card
  • A parent and child who have a joint loan
  • A business partner and yourself
  • Shared utility bills 

Why do lenders care about financial associations?

When you apply to borrow money from a lender, the lender will determine how much of a risk it will be for them to lend you money. Lenders want to ensure borrowers repay the money they lend, therefore they assess an applicant’s ability to repay the loan.

Ways financials associations can impact your credit profile

If your financial association has a poor credit history, lenders may also view you as a high risk borrower. For example, if your partner has missed credit payments, a lender might think you will help them repay their arrears before you pay your own debts.

In another case, if a financial associate has a high credit card balance, a lender might think that the household is overspending, reducing the likelihood of being approved for credit. Or lenders may offer less favourable products, such as those with restricted terms and higher interest rates.

 Having a joint account with someone means their credit history will be linked to your own. If the joint account holder makes late payments or misses payments altogether, it will show up on your credit profile.

If you are an authorised user on someone else’s credit card, their credit history will also be linked to yours. This means that their credit utilisation and payment history will impact your credit score.

By co-signing a loan, you are legally responsible for the debt if the borrower defaults on it. This means that if they miss payments, it will show up on your credit report and damage your credit score.

Removing financial associations

If you are concerned about the impact of old financial associations on your credit profile, it might be time to give your credit file a review and look for them to be removed. 

You can get a free ‘statutory’ copy of your credit report from:

If you see financial associations that are no longer valid,  ask a Credit Reference Agency to remove them. You’ll need to prove that the financial connection has ended.

You’ll need to complete a form of ‘financial disassociation’:

Financial associations can have a significant impact on your credit profile. It is important to be aware of the risks involved and to take steps to protect your credit profile:

  • Make sure  to choose your financial associates carefully. If you are considering opening a joint account or co-signing a loan with someone, make sure that they have a good credit history and that you can trust them to make their payments on time.
  • Regularly check your credit report to make sure that there are no errors or inaccurate information and dispute any incorrect information.
  • The best way to protect your credit from financial associations is to build your own strong credit history

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