Co-signing is an easy and effective way to make big purchases, but there are negative consequences for everyone involved if debts are not paid on time.
Co-sign involves a primary borrower to get assistance from a co-signer with a good credit score (600 – 900) for a loan approval. This can be beneficial for the primary borrower as it is easier and quicker to make big purchases. The co-signer also shares the responsibility of handling that debt and it will appear in their credit report. If there are signs of late or missed payments on the loan, it can negatively impact the credit score for the primary borrower and co-signer. Before considering co-signing, make sure both parties are aware on the terms of the loan agreement and have the means to pay it off.