COSIGNING DANGERS

Cosigning can ruin your credit report. Since the Equal Credit Opportunity Act requires lenders to report information about co-borrowers equally, you are equally liable for any late payments. If accounts go into default, the credit card issuers will go after the cosigners because they are typically the ones with the most credit.

Cosigning makes it more difficult for you to get credit. The amount of a cosigned loan becomes your debt and adds to your total debt load. The additional debt could weaken your ability to borrow.

You may not be notified until the borrower defaults. Often, cosigners don't find out that payments are not being made until the loan is in default, perhaps with the item repossessed. Then, you're responsible for the collection costs and the damage to your credit report.

You can get stuck with more than you expected. Credit lines can be increased without notification to the cosigner, leaving you responsible for more debt than you intended.

Source: Debt Counselors of America