Being a co-signer itself does not affect your credit score. Your score may, however, be negatively affected if the main account holder misses payments. You will owe more debt: Your debt could also increase since the consignee’s debt will appear on your credit report.

What is a cosigner notice?

When you co-sign a loan, the lender (known as the “creditor”) must spell out your obligations in a co-signer’s notice, which says: You are being asked to guarantee this debt. Think carefully before you do. If the borrower does not pay the debt, you will have to.

What do you need to know about co signing a loan?

The Co-signer’s Notice. When you co-sign a loan, the lender (known as the “creditor”) must spell out your obligations in a co-signer’s notice, which says: You are being asked to guarantee this debt.

Who is responsible for the debt of a co-signer?

A co-signer is a person who has agreed to guarantee the debt of another individual but does not receive any of the loan proceeds. In other words, a co-signer is responsible for the debt if the borrower does not make payments or defaults on the loan entirely.

What makes a secured loan riskier for a co signer?

Here are a few things to consider before signing on the dotted line: Secured loans are riskier for borrowers because there’s collateral on the line — a house, a car or another piece of property. Any added risk for the primary borrower is added risk for the co-signer, too.

What happens if a co-signer fails to repay a loan?

You’re simply a financial guarantor, and if the primary signer fails to repay the debt, then you’re next in line to make it happen. Depending on how late they are, you also may owe penalties, late fees, additional interest, and more. If the primary signer stops making payments or falls behind, you can also request a co-signer release.