What Is a Cosigner for a Loan?

A co-signer is a person – such as a parent, close family member or friend – who pledges to pay back the loan if you do not. This can be a benefit both to you and your lender. ... A co-signer is a person who is obligated to pay back the loan just as you, the borrower, are obligated to pay.

Is cosigning a loan a good idea?

Co-signers also help prospective borrowers get a much lower interest rate on a loan than they could on their own. An ideal co-signer will likely have: A credit score of about 670 or higher, which is considered “good” by the two primary credit score analysts—FICO and VantageScore.

How is a co-signer's credit affected?

How does being a co-signer affect my credit score? 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.