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Employing a Co-Signer to Boost your Credit

By Ruth Racey
Published: Sunday, October 11th, 2009

payments within a specified period of time. It is an advantageous arrangement not only for you but for the lender as well. You get the loan even if your credit score is not so good because a co-signer with a sound credit considerably reduces credit risk. The lender is happy there is somebody to pay the loan should you fail to make good on your promise. A co-signer will help you repair a bad credit record or if you do not have a credit record at all, build a solid one.

You do not choose just anyone to be your co-signer. He or she has to have a good credit reputation to increase your chance of getting that very important loan. The most obvious choice, of course, to be your co-signer is a relative or friend who trusts you. They will naturally understand the situation you are in. Ultimately, however, the decision to grant or reject the loan depends on the lender.

People know the importance of having a healthy credit score. For this reason many parents would help their young children slowly build a credible credit record. They do this by putting small bills in the name of their children and letting them pay the bills themselves. The children often take the payments out of their savings or from a part-time job. By the time their children become adults, they would have built viable credit records, perhaps viable enough for a college loan. If you have young children, you can definitely learn from examples set by parents who understand what a good credit can do. This approach teaches children responsibility over obligations at a young age and ensures that they have adequate resources available to them in the future.

When it comes to credit, most people start from scratch which means that you start with no credit credibility at all. This is very frustrating particularly if you want to take out a loan for college, a car or a business. This is where a co-signer performs an invaluable service.

A co-signer assumes a lot of risk sharing responsibility over paying a loan taken out by a person whose credit record is not respectable. The fact is that, he or she could very well be the person who can help you restore your credit score to respectability. If you are experiencing difficulties paying debts or needs fresh for a struggling business, a co-singer is definitely the break you need.

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