To Co-sign or Not to Co-sign....That's A Question that Can Ruin Your Credit

Many times in life we are faced with a hard decision. Whether to co-sign or not to co-sign will be one of those hard decisions. You have worked hard to keep your credit score high, and you have no problem whatsoever in getting approved for a any loan or credit card that you apply for. Not everyone is so lucky.

What co - signing means to you, is that you are jointly responsible for the loan or credit card that you are co-signing for. If the person you co-sign for falls behind on the payments the creditor expects YOU to make the payment. If the payment is not made, not only will this be a black mark on your credit, but if the creditor decides to take legal action, they can file against you too.

If a creditor does this to you, they can sue you for the money owed, sell your assets, or even garnish your wages to get their money, and ruin your credit rating in the process.Before You Co-sign For ANYONE Ask Yourself These 5 Questions

If you are considering co signing for someone, you need to think very seriously about what the risks are. You should also ask yourself the following 5 questions before signing on the dotted line.

Question 1. Are you wiling to lose your assets and good credit rating by co signing? This is a tough question because you wouldn't be considering helping someone out if they weren't important to you, and you didn't think they were responsible enough to make payments.

Question 2. Why does the person need you to cosign? Think about why the person needs you, is it because they have a really bad history for not paying their debts? If they are young and wanting to go for their first loan, ask yourself if they are mature enough and have the financial means to pay the payments on time for the life of the loan. If you have any doubts about the person, you shouldn't volunteer as a cosigner

Question 3. Have you read the fine print of the contract carefully? Make sure you are informed and know exactly where you stand, and what the lender can and can't do to you. Don't think a lending institution has your best interests at heart. Make sure that you understand the agreement thoroughly, and don't let them push you around.