Consigning for an Apartment Could Help or Hurt Credit

Dear Experian,

My grandson wants us to cosign for an apartment. Does this affect our credit scores in any way or just if he doesn't pay rent?


Dear MTP,

It sounds like you know that if your grandson failed to pay his rent it could negatively affect your credit report. However, your grandson's on-time rent payment history also may be included on your credit report, as well.

In the past, only negative rental payment history could become part of your credit report, but property management companies can now report positive payments through Experian's RentBureau. Reporting positive rental data enables people who may not have other credit accounts to build a positive credit history by paying their rent on time.

Not all apartment management companies currently report payments, so you may wish to inquire whether the company grandson is dealing with one that does. If so, this would help your grandson build his own credit history and perhaps not have to rely on you to co-sign on future accounts.

Small property landlords can also report payment information to Experian for a minimal fee through Experian's partnership with Clear Now.

The addition of a positive account may be beneficial to you. Still, it is worth mentioning that, if reported, the rental payment account could also be viewed by lenders as an additional financial obligation in your name. If you have excessive debt, you may have trouble qualifying if you apply for a loan for yourselves.

The decision to cosign for a family member should not be taken lightly. You should make sure your grandson understands how his actions can affect your credit history, as well as his.

Thanks for asking.
The "Ask Experian" team