Why do I Need a Co-Signer?
If you don’t have an established credit history, or if you do have an established credit history but it has some dings, you may need a co-signer to get approved for a loan or credit card. By co-signing a credit application, the co-signer is agreeing to assume responsibility for the debt should you, the primary borrower, default on your agreement to pay the debt.
Getting a loan with a co-signer can be a risky means of establishing credit. Do not consider bailing out on your responsibility just because you have a co-signer, however. Failing to pay according to the agreed upon terms will mar your credit history for years to come, limit your future access to credit, and potentially permanently damage an important relationship with your co-signer. If you take out a loan with a co-signer and do run into financial difficulty, you need to speak with your co-signer and lender immediately to set up payment arrangements that are agreeable to all.
Establishing credit in your own name is a must, particularly for women. It used to be that when a man and woman married, everything from the house and utilities to the checking account and credit cards were in the man’s name. But times have changed. With skyrocketing divorce rates and many women choosing not to marry until well after they’ve built a career and sizable nest egg, women need to maintain control of their own financial futures. Apply for a credit card in your own name. Then use it and pay it off on time. You can also apply for a personal loan or auto loan in your own name. The key is to make sure the accounts are in your name only and that you pay the bills on time. Just be careful when you are dealing with joint or co-signed accounts. Any negative records from these accounts will appear on both people’s credit reports.