Perhaps your son, daughter or other family member has asked you to co-sign on a mortgage, car loan or credit card account. Should you do it, and if so what are your financial obligations in the event of late payments or defaults?
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Will Cosigning on a Loan Help Your Child Build Credit?
Yes, provided all payments are made on time. The accounts will appear on both of your credit reports, contributing to your credit score as well as theirs. Make sure you have access to the account so you can verify the payments, since you’ll be just as legally responsible as your child.
Could Cosigning for an Apartment Lease Affect Your Credit?
Rental payments are not routinely reported to credit-reporting companies, but if your co-signer fails to meet lease requirements the landlord may take legal action. As such, your name would be included in the civil judgment or collection-agency account for the unpaid debt, which would likely appear on your credit report. Both have very negative impacts on credit scores and lending decisions.
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