--- title: Should You Co-Sign? description: "It is a question few want to hear: “Will you co-sign for me?” If you sign, will it hurt your credit score? Should you do it? Here are some factors to consider." image: https://go.hfcu.org/hubfs/Co-sign.jpg --- [![MoneyWisdom_HFCU_r2](https://go.hfcu.org/hs-fs/hubfs/MoneyWisdom_HFCU_r2.png?width=464&name=MoneyWisdom_HFCU_r2.png "MoneyWisdom_HFCU_r2")](https://go.hfcu.org/blog) Filter by Category** - [Show All](https://go.hfcu.org/blog) - [Security](https://go.hfcu.org/blog/topic/security) - [Personal Finance](https://go.hfcu.org/blog/topic/personal-finance) - [Auto](https://go.hfcu.org/blog/topic/auto) - [Business](https://go.hfcu.org/blog/topic/business) - [Credit Score](https://go.hfcu.org/blog/topic/credit-score) - [Home](https://go.hfcu.org/blog/topic/home) - [Credit Cards](https://go.hfcu.org/blog/topic/credit-cards) - [Life Changes](https://go.hfcu.org/blog/topic/life-changes) - [Insurance](https://go.hfcu.org/blog/topic/insurance) - [Investments](https://go.hfcu.org/blog/topic/investments) Filter by Category** - [Show All](https://go.hfcu.org/blog) - [Security](https://go.hfcu.org/blog/topic/security) - 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Most people do not want to ignore a family member or friend in need, but co-signing comes with risks that make many justifiably nervous to sign on the dotted line. So, should you do it? There are many factors to consider before making a decision. **What are the risks?** One risk that you incur when co-signing is the primary applicant making the payments late or not at all. Even if the primary applicant is the one who is supposed to make the payments, late or non-payments may still be recorded on your credit report, which can lower your credit score. If the primary applicant stops paying, you may also start to experience collection activity, such as phone calls from the creditor. You could even be sued. The creditor is under no obligation to try to collect from the primary applicant before taking action against you. If he or she stops making payments, do you have the money to pay the bill? If not, co-signing may not be a good idea. Even if the primary applicant makes all of the payments on time, you may still be affected if you are planning to apply for credit yourself in the future. When you apply for some types of credit, like a mortgage, many lenders consider how much debt you already have in deciding whether to lend to you and how much to lend to you. In general, the higher your debt payments, the less you can get. Lenders commonly include debt you co-signed for in calculating your level of debt, even if you are not the one paying it. (However, some lenders will ignore co-signed debt if you have proof that the primary applicant is making all of the payments.) This means that you may not get as much as you would have if you had not co-signed. **Why does the person need a co-signer?** You probably would not co-sign if you knew the person asking you would not make the payments, but how do you know ahead of time if he or she will? A low credit score can be seen as a sign that there is a good chance the person will not repay the debt, but it is also helpful to consider why the person has a low score. Was he not able to pay previous bills due to losing a job but has a well-paying job now? Is she still struggling with bill-paying due to purchasing an expensive house, fancy car, and luxury goods put on credit cards? A person who had problems in the past, but corrected them, is probably less of a risk than someone who continues to experience difficulties or exhibit poor financial habits. If the person has no credit score, you obviously cannot examine past credit use, but you can consider how conscientious he or she has been in other things, such as in saving money and paying household bills, when deciding if you should co-sign. **What are you being asked to co-sign for?** Is your daughter who just graduated from college asking you to co-sign for an apartment so that she will have a place to live or for a $2,000 loan so that she can buy a big screen television? Ask yourself if the person can do without what you are being asked to co-sign for. It may not make sense to put yourself at risk if what you are co-signing for is not even a necessity. The person should be able to work on building his or her credit score so that a co-signer will not be needed to get credit in the future. **Minimizing the risks** If you would like to co-sign, but have concerns, there are steps you can take to minimize your risk. One way would be to pay the creditor directly yourself and have the person send the money to you. He or she could send the payments to you late, but your credit score would not be affected as long as you send the payments to the creditor on time. Another option would be to choose a lender that allows you to see the account information on-line. This allows you to check the status of the account before the due date to see if the payment has been made, instead of waiting for the creditor to call you after the account has become delinquent. If you see that no payment was made yet, you can make it yourself. Co-signing can help a friend or relative in need, but it comes with risks. Understanding what the risks are, and why the person needs a co-signer, can help you make an informed decision and not unnecessarily jeopardize your financial future. Copyright © [BALANCE](http://www.balancepro.net/partners/hanscomfcu/) *Hanscom Federal Credit Union members can review their credit reports and scores at no cost. Make your appointment today.*  [![Request a free credit score review](https://no-cache.hubspot.com/cta/default/118438/ebfcf88d-863b-4572-a009-f6997dba479a.png)](https://cta-redirect.hubspot.com/cta/redirect/118438/ebfcf88d-863b-4572-a009-f6997dba479a)   *Others are also reading:* - *[How does my credit score affect my mortgage application?](https://go.hfcu.org/blog/bid/149497/how-does-my-credit-score-affect-my-mortgage-application)* - *[Can no-limit credit cards limit your credit score?](https://go.hfcu.org/blog/can-no-limit-credit-cards-limit-your-credit-score)* - *[Get a free credit score review](https://go.hfcu.org/blog/free-credit-score-review)* - *[How a credit score review saves you money (and headaches)](https://go.hfcu.org/blog/how-a-credit-score-review-saves-you-money-and-headaches)* - *[How can I set up a fraud alert on my credit report?](https://go.hfcu.org/blog/how-can-i-set-up-a-fraud-alert-on-my-credit-report)*   ** [Personal Finance](https://go.hfcu.org/blog/topic/personal-finance), [Credit Score](https://go.hfcu.org/blog/topic/credit-score), [Credit Report](https://go.hfcu.org/blog/topic/credit-report) [** First Steps for Seniors in Debt ](https://go.hfcu.org/blog/first-steps-for-seniors-in-debt) [** Easy Ways to Save Money on Your Water Bill ](https://go.hfcu.org/blog/easy-ways-to-save-money-on-your-water-bill) ### About Author ![Hanscom Federal Credit Union](https://go.hfcu.org/hubfs/HFCU-Profile-1000x1000.jpg) Hanscom Federal Credit Union Hanscom Federal Credit Union, a purpose-driven $1.9 billion organization based in Littleton, MA, empowers its members to achieve financial wellness. 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Moreover, Hanscom Federal Credit Union's privacy policies do not apply to any of the linked websites within this blog. Please consult the privacy disclosures on those linked sites for further information. ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Hanscom Federal Credit Union" }, "dateModified" : "September 22, 2021, 9:06:43 PM", "datePublished" : "2017-12-26 12:00:00", "description" : "It is a question few want to hear: “Will you co-sign for me?” If you sign, will it hurt your credit score? Should you do it? Here are some factors to consider.", "headline" : "Should You Co-Sign?", "image" : { "@type" : "ImageObject", "url" : "https://cdn2.hubspot.net/hubfs/118438/Co-sign.jpg" }, "mainEntityOfPage" : { "@id" : "https://go.hfcu.org/blog/should-you-co-sign", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://cdn2.hubspot.net/hubfs/118438/Logo%202.jpg" }, "name" : "Hanscom Federal Credit Union" } } ```