If You Cosign A Student Loan For Someone Does It Show Up On Your Credit Report?

If you agree to sign a student loan, or any loan for that matter, you are taking responsibility for the payments if the account holder does not pay.  We all want to help our friends and loved ones, but might not be aware of the damage it can cause on your credit history and FICO score.

What would happen if the signer does not pay? As a co-signer, you are now responsible.  No, it is not YOUR account, and not YOUR debt, but when you co-signed, you legally took the responsibility as if it were your own account.  You will start receiving calls and letters from the collectors.  Late or missed payments will be reported on the signer and the co-signers credit reports. Negative items from co-signing will be reported in your credit history as if it was your own debt.  Your financial wellbeing is at risk when you co-sign for any type of loan.

If the original signer does not pay, and you are now responsible, how would you feel towards the original signer? You put your faith in that person and only wanted to help them.  Not only is your credit report at risk, but so is the relationship between the signer and co-signer.

Before you think about co-signing, weigh the pros and cons.  Obviously this person needs your help, but is there any other person that could help them? Do you trust them to make their payments? Talk to the signer about how this could play out.  Is there a system that can take place to make sure payments are being made? Use your good judgment here, and do not be afraid to say no.


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