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Does Being a Cosigner Affect Your Credit?
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Last Updated: June 18, 2025
Key Takeaways
- Cosigning a loan application could help a friend or family member qualify even if they have poor credit.
- Cosigners take responsibility for repaying a loan if the primary borrower fails to do so.
- Most credit card companies don’t allow cosigners, but there are other options for people without good credit.
Cosigning a loan application can help a friend or family member get approved for a loan, which feels great and could provide some much-needed assistance to someone who’s important to you.
But, depending on your friend or family member’s financial decisions, it could have big consequences for your credit and your finances.
It all depends on how well the primary borrower manages the loan. And, if they run into difficulties, whether you’re able to cover for them.
What is cosigning?
When you cosign a loan application, you make a promise to the lender. By signing your name, you agree to repay the loan if the primary borrower doesn’t pay it off.
If you have a good credit history, this may reassure the lender that the loan will be repaid. That could help someone with a short credit history or negative marks on their credit report get approved for a loan, especially if you have a good credit score.
It’s important to remember that you, as the cosigner, are agreeing to repay the loan if the main borrower fails to do so. If you can’t do that, both you and the borrower will face negative credit consequences. Late or missed payments could lower your credit score and make it harder to get a new loan or credit card in the future.
However, if the primary borrower makes all their payments on time and doesn’t need help repaying the loan, you won’t have to make any payments. And your credit could actually improve.
Who can include a cosigner on an application?
People applying for many types of loans or credit—including car loans, personal loans, and student loans—may be able to include a cosigner.
Some federal student loans allow an “endorser”, which is very similar to a cosigner. Private student loans usually use the more familiar term “cosigner”.
Different lenders have different rules on cosigners. Some may allow them for specific types of loans or lines of credit, while others might not. Consult the loan documents to find out if the lender allows cosigning.
Most credit card companies don’t allow cosigners on credit card applications. There are other ways for people with a short credit history or a low credit score to get credit cards, though—we’ll discuss them below.
Ways cosigning can affect your credit
Cosigning a loan doesn’t impact your credit score on its own. However, the primary account holder’s activity might affect your credit score.
When does cosigning help your credit?
Lenders may prefer borrowers who have managed several different types of credit. If you cosign a form of credit you don’t already have, your credit mix may improve, possibly improving your credit score. (For example, if you’ve only had credit cards, but you cosign on a car loan, you’ve now improved your credit mix.)
Whether you or the primary account holder make the monthly payment, consistent on-time loan payments could build your credit score. Setting up automatic payments may make it easier to meet your payment deadlines.
Fulfilling the loan agreement by repaying it on time shows future lenders that they can trust both you and the primary account holder to responsibly manage debt.
When does cosigning hurt your credit?
As a cosigner, you’re responsible for payments the primary account holder misses. If you both miss payments or consistently pay late, your credit score might suffer.
The account may go to collections if missed payments pile up, which could severely damage your credit. And no one wants to get calls from a debt collector.
Cosigning a loan could increase your credit utilization ratio (the amount you owe compared to your credit limit). If that ratio gets too high, it could hurt your credit score.
Main factors to consider before cosigning
Cosigning a loan is a major financial decision. Before you take this step, consider the following factors:
It doesn’t cost anything upfront to become a cosigner. However, if the primary borrower doesn’t repay the loan in full, you’ll become responsible for the remaining debt. Make sure you can afford the total loan amount before you take on the responsibility. Otherwise, you may face damage to your credit score and wage garnishment or legal issues, according to the Consumer Financial Protection Bureau (CFPB).
Before you cosign a loan, it’s a good idea to make sure the primary borrower has a repayment plan. Consider how they’ll manage the debt if they lose their job or have to cover an emergency expense. If the borrower will need you to make the payments in the case of a financial setback, it’s good to know this in advance.
The Federal Trade Commission explains that some states offer specific protections for cosigners. You can contact your state banking agency or state attorney general for more information.
As a cosigner, you should always know the loan’s status. Make sure you and the borrower check in about the loan regularly to discuss payments and any possible issues. You may also contact the lender directly to request monthly loan statements. That way, issues like missed payments won’t catch you by surprise.
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Alternatives to cosigning a credit card application
While cosigning could help a loved one qualify for a loan, most credit cards don’t allow cosigners. If you want to help someone with a short credit history or a low credit score get a credit card, you’ll need to take advantage of other options.
Add someone as an authorized user
Some credit card issuers allow you to add an authorized user, like a child, family member, or friend, to your credit card account. Authorized users often receive their own credit card, which they can use to make purchases. The primary account holder is responsible for paying bills and managing the account. Both users' activity may appear on each credit report.
Typically, the primary account holder’s credit choices influence the authorized user’s credit score. That means making timely payments and keeping your credit utilization to a minimum could help you and the authorized user.
Authorized users usually don’t have to undergo a credit check, so this could be a helpful option for friends or family members who don’t have a credit history or want to build their credit scores.
Consider secured or student credit cards
People with limited credit history may still qualify for their own credit cards. Some credit cards are geared toward people without credit history and people who want to rebuild their credit scores. Secured credit cards are a great example.
A secured card typically doesn’t require a credit score to apply. Instead, cardmembers provide a deposit to secure the card. The card’s credit limit is usually equal to the deposit amount. If cardmembers don’t repay the balance, the credit card issuers can use the deposit to cover it and close the account.
Did you know?
Students who want to start building their credit history may consider a student credit card. There’s no credit score required to apply for Discover Student credit cards.2
The bottom line
Cosigning could help a friend or family member get a loan they may not otherwise qualify for, but not without risks. Before you agree to cosign a loan, it’s important to understand the possible consequences and make sure the primary borrower has a plan.
Most credit cards don’t allow cosigners on the application. If someone with a short credit history wants to apply for a credit card, they could consider asking a friend or family member to add them as an authorized user or applying for a secured or student credit card.
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