If you have a less than perfect credit score and are looking to obtain a line of credit, you may be asked to provide a cosigner by your lender.
A cosigner is someone that assists a borrower to get approved for a loan. A cosigner “lends” their credit to the main borrower in hopes of getting them approved for a certain loan or line of credit.
Questions About Cosigning
Does a cosigner need to have good credit?
Yes. If you have bad credit, there is a certain credit score your cosigner will need to have. Most credit experts agree that a credit score of 700 is the minimum requirement for a cosigner.
Can a cosigner live in another state?
Yes. A cosigner does not have to be in the same city or state as you. A lender only cares about a cosigner’s credit score. Chances are, the lender will fax the cosigner any documents they need to sign.
Are a co-borrower and cosigner the same?
No. a co-borrower has ownership rights to the asset where a cosigner does not. A cosigner will still be responsible for paying for any missed loan or credit payments.
Does a cosigner need to be a citizen of the US?
Yes, a cosigner must be a US citizen. A lender will not accept a person with a green card or permanent residency documents.
Can a cosigner be retired or on a fixed income?
Yes. A cosigner can be on social security and still assist you with getting a line of credit. Lenders only want to see cosigners with healthy credit.
It is essential that you and your cosigner have a healthy relationship. Cosigning is a massive responsibility as the cosigner will be on the hook for any of the main borrowers missed payments.
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