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How much will cosigning a student loan lower your credit score?
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Answered 2008-07-21 00:46:25
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Cosigning a loan will not lower your credit score unless payments are late, or if the borrower defaults and you cannot make the payments yourself. A cosigner is equally liable for the loan, so if you cannot make the payments, you should not sign.
The way that cosigning will affect your credit report is in your debt-to-income ratio. The loan you cosign will show up as part of your debt, so a lender may not want to loan you more money if it looks like your debts are too high.
Something that people often overlook though, is that cosigning a loan can actually improve your credit rating if the borrower makes his payments on time. You will get credit for making payments and paying off this debt as if it were your own.
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Because you have taken on the risk of a deadbeat.
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Does a parent's credit score affect student loan?
If the student loan is taken out in the name of the student then no. The student's credit score is separate from anyone else's. If the student loan is taken out in the name of the parent or with them as cosigner then yes - their credit scores would come into play.
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Can you improve your credit score by cosigning for someone who has little or no credit?
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Where is it possible to find a credit score calculator?
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Does consolidating student loans affect or lower credit score?
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A lower credit score will help with what?
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What effect does a credit score have on a mortgage?
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Does each credit report you make lower your credit score?
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