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Cosigning for an Apartment Lease Could Hurt Your Credit

Dear Experian,

I would like to better understand how co-signing for apartment leases affects credit.

– IAB

Dear IAB,

When you cosign for an apartment lease, you are personally guaranteeing that rental payments will be made on time for the duration of the lease and that you will be responsible for any damage to the property. If the person you are cosigning for defaults on the lease agreement, you are liable for the full term of the lease.

Landlords and property management companies can report both positive and negative rent payment history to consumer reporting companies which specialize in collecting rental history, such as RentBureau. Experian owns RentBureau, so the positive history they collect is also included in Experian credit reports.

Reporting positive rent payments has proven very beneficial for people who have little or no credit history. At this time, Experian does not include negative rental history. However, failing to pay the rent on time can have a negative impact, just like failing to pay your other bills on time.

A negative rental history could affect your ability to obtain rental housing in the future because many landlords check rental histories with companies such as RentBureau before signing a new lease. If the account were to become seriously delinquent, it could result in a collection account or a civil claim judgment, both of which also could appear on your credit report.

As with other types of credit, cosigning for an apartment should not be taken lightly. Before you sign, make sure that the individual you are signing for understands how their actions could affect you and your creditworthiness.

Thanks for asking.
The “Ask Experian” team

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