Co-Signing Loans

I read credit reports from Veterans every week where I see late payments or charge offs/collections from a loan that they feel they are not responsible for and cannot understand why it is on their credit report. Co-signing loans is not a good idea. People often assume that they are just doing a good deed to help a friend or family member, and may even mistakenly believe that it’s simply a one-time event.

But when you co-sign a loan, you will be involved in that loan and that loan will be on your credit report until it is fully paid. In the event that your friend or family member makes a late payment, this will have an impact on your credit score. Worse, should the loan go into default, this will also show up on your credit. Basically, what you are saying when you co-sign a loan is that if they don’t pay it, you will.