There are exceptions to every rule. That said if someone asks you to co-sign a loan, just say no to them.
The big reason for this is there is a reason they need a co-signer. It can be one of two things, it’s either they don’t have any credit. So, that means they are going to be establishing their credit at your risk. Or worse yet, the credit they do have has not been good, putting you on the line.
There are also some other drawbacks. As soon as you co-sign for them it’s going to show up on your own credit report. So, this means they can interfere if you need to get a loan. It can interfere with you getting a new loan.
That’s because it is listed at debt against you so, you may not get the loan or worse yet you might have to pay a higher interest rate even though it’s not your loan it’s one you co-signed for.
Finally, it can hurt your credit score. You work hard for your credit score, but again because it seems like a higher debt level on your credit report you drive the credit score down.
So in general, if asked to co-sign a loan, just say no.
