February 17, 2006, Newsletter Issue #2: When You Need a Co-Signer
Tip of the Week
If you don’t have an established credit history, or if you do have an established credit history but it has some dings, you may need a co-signer to get approved for a loan or credit card. By co-signing a credit application, the co-signer is agreeing to assume responsibility for the debt should you, the primary borrower, default on your agreement to pay the debt. Getting a loan with a co-signer can be a risky means of establishing credit. Do not consider bailing out on your responsibility just because you have a co-signer, however. Failing to pay according to the agreed upon terms will mar your credit history for years to come, limit your future access to credit, and potentially permanently damage an important relationship with your co-signer. If you take out a loan with a co-signer and do run into financial difficulty, you need to speak with your co-signer and lender immediately to set up payment arrangements that are agreeable to all.
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