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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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17y ago

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