Credit Advice » Life Stages » Students » Cosigning a Loan Could Affect Your Future Credit

Cosigning a Loan Could Affect Your Future Credit

Dear Experian,

Will cosigning a student loan hurt my chances of receiving a car loan in the future?


Dear SWK,

When you cosign a loan you share full responsibility for the debt and it will be included in your credit history. As a result, doing so can affect your creditworthiness and your ability to qualify for future loans.

There are many things to consider when deciding whether or not to cosign for a loan for someone else. The first thing you need to know is that any default in payment by the other signer will show on your credit history as well as theirs.

By cosigning the loan, you are telling the lender that you agree to be responsible for making sure all payments will be made on time.

The next thing to consider is that the debt will be included in your total indebtedness. Future lenders will consider the debt and the monthly payments as part of the total amount you owe when determining whether they feel you are capable of taking on more debt. Whether they approve you for the car loan depends on whether they feel your income can support the car payment and the student loan payment, as well as any other obligations you have.

While none of this means that you shouldn’t cosign for the student loan, it is important that you be aware of these things before making your decision.

Thanks for asking.
The “Ask Experian” team

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