GOBankingRates works with many financial advertisers to showcase their products and services to our audiences.
These brands compensate us to advertise their products in ads across our site.
This compensation may impact how and where products appear on this site.
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information.
you could read more about oureditorial guidelinesand our products and servicesreview methodology.
No big deal, right?
Cosigning loans is more than just a signature.
And if youre wondering, does cosigning affect your credit?
the answer is a definite yes.
The impact at the end of the day depends on how the loan plays out.
Lets break it all down so you’re able to make a smart decision you wont regret.
What Does It Mean to Cosign?
Cosigning means youre promising the lender thatyoull repay the loanif the primary borrower doesnt.
Youre not just vouching for them, youre taking on legal responsibility for the full debt total.
People often cosign for:
If the borrower makes timely payments, great.
If not, the lender wont hesitate to come knocking on your door next.
So, Does Cosigning Affect Your Credit?
Yes,cosigning absolutely shows up onyour credit report.
From a lenders perspective, youre just as responsible for that loan as the person youre helping.
When Cosigning Can Help Your Credit
Believe it or not, cosigningisnt always risky.
In some cases, it can even boost your credit score a little.
Heres how things can go sideways:
Cosigning can seriously damage your credit if the borrower doesnt follow through.
Its about financial reality.Ask yourselfthese key questions first:
Dont cosign just because you feel guilty or pressured.
Do it only if youre confident theyll pay and you’re free to cover it if they dont.
How To Protect Yourself If You Decide To Cosign
Still leaning toward saying yes?
Good on you for wanting to help.
Just confirm you protect yourself as much as possible.
You might be able to negotiate a way out, but its not guaranteed.
Cosigner vs. Co-Borrower: Whats the Difference?
Its easy to confuse the two, butcosigningandco-borrowingare very different.
Heres a quick comparison:
Cosigners are the backup.
Co-borrowers are full partners.
Final Thoughts to GO: Should You Cosign?
So,does cosigning affect your credit?No doubt about it.
It can help (or really hurt) depending entirely on how the borrower handles the loan.
Before you say yes, check that:
Cosigning is a big deal.
Done right, it can be a lifeline for someone you care about.
But its not something you should do lightly.
Ask questions, read the fine print, and protect your financial health while helping someone else build theirs.
Want to get smarter about credit?
you might learn more about GOBankingRates processes and standards in oureditorial policy.
Share This Article:
