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Why You Shouldn’t Co-Sign

Written by Tim Peak on February 5, 2011.

Co-signing someone else’s loan is a big risk. Many people co-sign thinking they’re just helping the other person qualify for a loan. Sure, that’s part of it, but there’s more. Whenever you co-sign for someone, you’re basically saying if the person defaults on the loan, you’ll take responsibility for the payments. Is that what you mean to say when you co-sign for someone else? Probably not.

Read: Why You Shouldn’t Co-Sign for Someone Else

If you can’t qualify for a loan without a co-signer, you should work on improving your credit so you can qualify alone. Asking someone else to guarantee your debt isn’t fair to that person. Even if you pay on time, you temporarily limit their ability to get new credit cards and loans of their own.

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