Deciding whether to cosign a car loan for your son or daughter

Dear Experian,

My son has less than perfect credit but was told by his bank he could get a car loan with a co-signer. I have extremely high scores and do not want them lowered for any reason under my control. Assuming all of his loan payments are made on time and the loan always remains current, will this negatively affect my credit scores?



Dear BOA,

As a cosigner, you accept full responsibility for the debt. That means the account and its payment history will be part of your credit report.

As long as the payments are made on time for at least the minimum due, your credit scores should not be affected negatively. However, if payments are late or missed, they will appear on your credit report, and your credit scores would be affected.

I’ve had others inquire as to whether the person’s past negative credit history could become associated with their report if they cosign a loan. The answer to that question is no. The other credit history is not associated with you in any way. Only the cosigned account would appear on both credit reports.

Cosigning is a decision that should not be taken lightly. Your concerns are very valid. It’s difficult to say no to a relative, particularly a child. By cosigning, you could help them begin to reestablish a strong credit history, but by doing so you can put your credit history at risk.

Thanks for asking.

- The “Ask Experian” team