Dear Experian,

If a person cosigns a student loan for a college student, how does it affect their credit? Does the amount of the loan get included in their debt-to-income ratio?

- CHA

Dear CHA,

When you cosign for a loan, including student loans, you are accepting full responsibility for the debt if the other person doesn’t pay. As a result, it typically will appear in your credit report.

The loan amount would be scored as part of your total debt and the payment history definitely could impact a lender’s decision to approve your loan application.

Your income is not part of your credit report. Instead, you provide that information when you complete a loan application. They will likely include that student loan debt in any debt-to-income ratio calculations they may make.

Your debt-to-income ratio is a tool often used by mortgage lenders to help determine if you can afford to make the payments on a new loan. Simply add up all of the payments from the debts in your credit report and divide them by your total gross monthly income. A common rule of thumb is to have a debt-to-income ratio of no more than 36 percent including your mortgage payment.

Thanks for asking.