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About Co-Signing
A co-signer is required when an individual applying for a credit card or loan does not meet the lender's criteria. The co-signer will have their personal credit checked and need to sign an agreement to pay back the debt if the primary applicant fails to do so. Usually both the primary applicant and the cosigner are jointly liable for the debt.
The implication here is that default by the primary applicant with one or two missed payments, will result in the creditor attempting to collect from either of the two or both until the full amount is repaid. The cosigner may even have to pay off the entire amount and can also be sued, have assets seized and wages garnished.
Being asked to become a co-signer requires a great deal of thought. The risk is huge, so is the benefit worth it? Becoming a co-signer may sometimes be beneficial but only when you can count on the primary applicant to be responsible enough to handle the obligation. Credit card info.com reports:
When an individual credit applicant does not meet a lender's requirements, they may be able to obtain a loan or other account by having a co-signer. The co-signer's personal credit will also be checked, and s/he will be required to sign a contract agreeing to pay the debt if the primary applicant does not. Typically, the contract will specify that the primary applicant and the cosigner are "jointly and severally liable" for the debt.
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