Although lender requirements vary, a cosigner generally needs a credit score that is at least considered "very good," which usually means at least 670 or better. A cosigner can help someone with a bad credit score or no credit get all types of loans — from personal loans or lines of credit to student loans and auto loans, but a cosigner takes on some of the risk if that account goes into default.
If you’re wondering whether you need a cosigner or wondering if you should be a cosigner yourself, this post offers details on what it means for both. You can explore the advantages and disadvantages of getting a cosigner or being one as well as understand cosigner requirements. Cosigning depends on individual circumstances, and this post helps you determine if cosigning works for your financial situation.
A cosigner has equal responsibility for a loan along with the primary borrower. That means if a loan goes into default, the lender can pursue repayment from both the primary borrower and the cosigner. A cosigner may be needed on everything from personal loans to credit cards to rental agreements. 
Cosigning a loan may improve your credit score. Since the debt appears on your credit report as well as the borrower’s, on-time payments may reflect well on your credit history and could make a positive impact on your credit score. Similarly, the new account gets added to your credit mix and, depending on the type of account, it could show that you can manage different types of credit. 
On the other hand, cosigning a loan may hurt your credit score. If the borrower makes late payments or defaults, those negative items appear on your record as well. 
In the next sections, we explain the different requirements for someone to be a cosigner on all types of loans. Lenders have different requirements depending on a number of factors, such as the type of loan, so the individual situations can vary. However, you can expect to see these general guidelines when cosigning for anything.
Typically, a cosigner needs a credit score of 670 or better to be approved. This range is usually classified as very good to excellent credit. Keep in mind that if you’re cosigning for someone, the primary borrower probably doesn’t have great credit to begin with or a credit history at all, so the lender needs someone with particularly strong credit to make the risk worthwhile.
Cosigners for student loans or personal loans typically need to verify their address, provide a Social Security number, income documentation including pay stubs, bank account information and tax documents. Cosigners for mortgage loans typically need the same documentation and a bit more, including a list of debts, a list of assets and may need to prove their relationship to the borrower. In both cases, lenders will pull the cosigner’s credit report as well.
Lenders require cosigners to prove their identification with basic identifying documents like a driver’s license or passport, as well as require proof of a Social Security number. Lenders may also require documents that prove the cosigner’s relationship to the borrower.
Cosigning offers both risks and rewards, so you should consider this responsibility carefully before entering into this arrangement. Consider some of the pros and cons of both having a cosigner and being a cosigner to help you decide if either option works for you.
If you’re getting a cosigner for a loan, the benefits can be enormous, but you should also consider the downsides.
If you’re the one cosigning, carefully consider all the pros and cons, which are quite different from those of the primary borrower.
You need a cosigner when you don’t have a good enough credit score or not enough credit history to qualify for a loan or other forms of credit, such as credit card. Sometimes your credit may be in good shape, but you don’t meet the income requirements or your lender may have particularly high standards for loan approval. Just carefully consider the advantages and disadvantages to getting a cosigner as well as whether you can take on the debt before attempting to get one.
If you don’t want to risk relationships with friends or family members by having them cosign for you or you just aren’t able to find anyone willing to cosign, consider the alternatives:
Cosigning has many benefits but also perils, consider the factors carefully. While a cosigner can immediately help you qualify for loans or approval for an apartment, it also can place the cosigner at significant financial risk — and potentially risk your relationship.
Likewise, if you’re thinking about becoming a cosigner, you should make sure the person you’re cosigning for is completely trustworthy and will make payments on time. After all, you’re protecting not only your finances, but your relationship to that person as well.
Ana Gonzalez-Ribeiro, MBA, AFC® is an Accredited Financial Counselor® and a Bilingual Personal Finance Writer and Educator dedicated to helping populations that need financial literacy and counseling. Her informative articles have been published in various news outlets and websites including Huffington Post, Fidelity, Fox Business News, MSN and Yahoo Finance. She also founded the personal financial and motivational site www.AcetheJourney.com and translated into Spanish the book, Financial Advice for Blue Collar America by Kathryn B. Hauer, CFP. Ana teaches Spanish or English personal finance courses on behalf of the W!SE (Working In Support of Education) program has taught workshops for nonprofits in NYC.
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