What we verified in “Co-signing a loan or lease: the risks before you sign”

Statements and where we checked them

The statements with rules, figures or dates, with the exact place in the source and the date we checked them.

1. According to the CFPB, a co-signer is someone, such as a parent, relative or friend, who adds their information, including income and credit record, to someone else's loan application to help them qualify or get better terms; the co-signer takes on shared responsibility and pledges to repay if the primary borrower does not; even without the same rights to the vehicle, the co-signer is equally responsible for making sure the loan is paid; if the borrower does not pay, you will be asked to pay, and missed payments can appear on your credit reports and hurt your scores; on default, the lender may repossess and sell the vehicle and, depending on state law, sue you and the borrower for the balance; before agreeing, check your budget, and you can ask the lender for monthly statements or online account access; a lender cannot force you to put your information on someone else's loan or force a spouse to co-sign unless they apply jointly; and if you feel uncomfortable or forced to sign, you can walk away.

   Sources 1 · Should I agree to co-sign someone else’s car loan? (last reviewed September 12, 2023): 'adds their information, including income and credit record, to someone else’s loan application'; 'pledging to pay it back if the primary borrower does not'; 'you don’t necessarily have the same rights to the vehicle as the primary borrower'; 'are equally responsible for ensuring the loan is paid back'; 'you will be asked to make the payment'; 'Any missed payments could also appear on your credit reports and impact your credit scores'; 'the lender repossessing and selling the vehicle'; 'the lender could sue you and the primary borrower for the outstanding loan balance'; 'check your budget'; 'request that the lender send you monthly loan statements or provide you access to the online loan account'; 'A lender can’t force you to put your information on someone else’s loan'; 'unless they are applying jointly for the loan'; 'If you’re feeling uncomfortable or forced to sign, you should walk away' · Checked October 17, 2026

2. According to the CFPB, a co-signer with good credit can increase the likelihood that the borrower qualifies or gets better terms, such as a lower interest rate; being told you need a co-signer generally means the lender will not offer the loan based solely on your own income and credit; if the borrower does not pay, the co-signer is responsible for repaying even if they never drove the vehicle, and late payments can hurt both people's credit; a lender cannot require a co-signer if the applicant qualifies alone, it is worth asking whether you would be approved alone and on what terms, and the lender cannot require a spouse to co-sign unless both are applying.

   Sources 2 · Why would I need a co-signer for an auto loan? (last reviewed September 12, 2023): 'can increase the likelihood that you qualify for a loan or get better loan terms, including a lower interest rate'; 'it generally means the lender will not offer you the loan based solely on your own income and credit record'; 'your co-signer is responsible for repaying the loan, even if they’ve never driven your vehicle'; 'both your credit and your co-signer’s credit could be negatively affected'; 'they can’t require you to have a co-signer if you qualify on your own'; 'ask whether you would be approved on your own'; 'They also can’t require your spouse to be a co-signer unless you’re both applying for the loan' · Checked October 17, 2026

3. Under Regulation B, a creditor may not require the signature of the applicant's spouse or any other person other than a joint applicant if the applicant qualifies under the creditor's standards for the amount and terms requested; if under those standards another person's liability is needed, the creditor may request a cosigner, guarantor or similar party, and the spouse may serve, but the creditor may not require that it be the spouse.

   Sources 3 · 12 CFR §1002.7(d)(1) and (5): 'a creditor shall not require the signature of an applicant's spouse or other person, other than a joint applicant, on any credit instrument if the applicant qualifies under the creditor's standards of creditworthiness'; 'a creditor may request a cosigner, guarantor, endorser, or similar party'; 'but the creditor shall not require that the spouse be the additional party' · Checked October 17, 2026

4. According to the CFPB, a creditor generally cannot require your spouse's (or another person's) signature for individual credit if you qualify on your own for the amount and terms requested; but for a mortgage or home equity loan, a lender may require your spouse or another person to sign if state law requires it to secure your property as collateral, for example to create a valid lien or clear title.

   Sources 4 · Does my spouse have to co-sign my mortgage loan? (last reviewed December 11, 2024): 'a creditor such as a lender cannot require your spouse’s (or another person’s) signature for individual credit if you qualify on your own for the amount and terms requested'; 'a lender may require your spouse or other person to co-sign if it’s required by state law to secure your property as collateral'; 'This might include documents to create a valid lien or clear title' · Checked October 17, 2026

5. Under the FTC Credit Practices Rule (16 CFR §444.3), it is deceptive for a lender or retail installment seller to misrepresent a cosigner's liability, and unfair to obligate a cosigner without first informing them of that liability; to prevent this, before the cosigner becomes obligated it must give a separate document, the 'Notice to Cosigner', which says you are being asked to guarantee the debt and should think carefully; that if the borrower does not pay, you will have to; that you may have to pay up to the full amount, plus late fees or collection costs; that the creditor can collect from you without first trying to collect from the borrower and can use the same collection methods against you, such as suing you or garnishing your wages; that if the debt is ever in default, that may become part of your credit record; and that the notice is not the contract that makes you liable.

   Sources 5 · 16 CFR §444.3(a)–(c): 'to misrepresent the nature or extent of cosigner liability to any person'; 'to obligate a cosigner unless the cosigner is informed prior to becoming obligated'; 'a disclosure, consisting of a separate document'; 'Notice to Cosigner'; 'You are being asked to guarantee this debt. Think carefully before you do'; 'If the borrower doesn't pay the debt, you will have to'; 'You may have to pay up to the full amount of the debt if the borrower does not pay'; 'You may also have to pay late fees or collection costs, which increase this amount'; 'The creditor can collect this debt from you without first trying to collect from the borrower'; 'such as suing you, garnishing your wages, etc'; 'If this debt is ever in default, that fact may become a part of your credit record'; 'This notice is not the contract that makes you liable for the debt' · Checked October 17, 2026

6. Under the FTC Credit Practices Rule, the lenders and retail installment sellers it covers are those within the FTC's jurisdiction; and a cosigner is a person who becomes liable for another person's obligation without compensation, including anyone whose signature is requested as a condition of granting credit to another person, whether or not the document calls them a cosigner.

   Sources 6 · 16 CFR §444.1(a), (b) and (k): 'within the jurisdiction of the Federal Trade Commission'; 'A natural person who renders himself or herself liable for the obligation of another person without compensation'; 'whose signature is requested as a condition to granting credit to another person'; 'whether or not he or she is designated as such on a credit obligation' · Checked October 17, 2026

7. According to the CFPB, a co-signer agrees to repay a loan along with the primary borrower; a private student loan may require a co-signer; the student borrower must make all payments on time; co-signers are equally responsible for and legally obligated to repay the loan; any late or missed payments affect both the co-signer's and the student's credit history; and if the loan defaults, private lenders often hire collection agencies to get the co-signer to repay, and the co-signer could also be sued.

   Sources 7 · What is a co-signer for a student loan? (last reviewed September 6, 2024): 'A co-signer is a person who agrees to repay a loan along with the primary borrower'; 'In order to qualify for a private student loan, you may be required to have a co-signer'; 'The student borrower is required to make all payments on time'; 'Co-signers are equally responsible for and legally obligated to repay the loan'; 'Any late or missed payments for a co-signed loan will affect both the co-signer and the student’s credit history'; 'private lenders often hire collection agencies to get a co-signer to repay'; 'you could also be sued by a debt collector or lender' · Checked October 17, 2026

8. The CFPB says most private student loans have co-signers; that a 2019 survey found a quarter of co-signers end up making at least one payment because the primary borrower failed to; it recommends talking with the primary borrower when repayment begins, asking for statements and checking your credit report; some loans allow the co-signer to be released if the borrower makes payments for a certain length of time, and lenders should publish their requirements; and if the loan defaults, the default goes on your credit report and the lender can sue both you and the borrower.

   Sources 8 · Tips for student loan co-signers (page last modified August 8, 2022): 'Most private student loans have co-signers'; 'A 2019 survey found that a quarter of co-signers end up making at least one payment because the primary borrower failed to'; 'Have a conversation with the primary borrower when repayment begins'; 'Ask the primary borrower or the lender for statements'; 'Some loans allow you to be released from liability if the borrower makes payments for a certain length of time'; 'Lenders should be transparent about their co-signer release policies'; 'The default will go on your credit report as well as the primary borrower’s, and the lender can sue both you and the primary borrower' · Checked October 17, 2026

9. According to the CFPB, some private student loans have options to release the co-signer; the lender or servicer may have specific criteria, which are in the loan's terms and conditions and on its website.

   Sources 9 · If I co-signed for a private student loan, can I be released from the loan? (last reviewed September 24, 2024): 'some loans do have options to release the co-signer'; 'The lender or servicer may have specific criteria, which you can find in the loan’s terms and conditions and on the lender’s or servicer’s website' · Checked October 17, 2026

10. According to the CFPB, private student loan companies are not allowed to garnish a co-signer's Social Security check if the borrower does not repay, but they can take the co-signer to court to collect; only federal student loans can result in garnishment or offset of Social Security benefits, and most federal student loans do not require a co-signer.

    Sources 10 · If I co-sign for my grandchild's student loan, can the lender garnish my Social Security check if they don't repay the loan? (last reviewed March 27, 2024): 'are not allowed to garnish Social Security checks of co-signers if the borrower doesn’t repay the loan'; 'But the lender can still pursue you and even take you to court'; 'Only federal student loans can result in garnishment, or offset, of Social Security benefits'; 'most federal student loans do not require a co-signer' · Checked October 17, 2026

11. According to HUD Handbook 4000.1 for FHA loans, a contingent liability is a debt you may have to repay only if a specific event occurs, such as another obligated party defaulting, and it includes co-signer liabilities; the lender must include those monthly payments in your obligations unless it documents that there is no possibility the creditor will pursue you if the other party defaults, or that the other party has made 12 months of timely payments; to leave out a co-signed debt, it must get evidence that the other party has made regular on-time payments for the previous 12 months.

    Sources 11 · Handbook 4000.1 (last revised August 12, 2026), II.A.4, 'Contingent Liabilities (TOTAL)': 'A Contingent Liability refers to a liability that may result in the obligation to repay only when a specific event occurs'; 'Contingent liabilities may include Co-signer liabilities'; 'The Mortgagee must include monthly payments on contingent liabilities in the calculation of the Borrower’s monthly obligations unless'; 'the other legally obligated party has made 12 months of timely payments'; 'If the cosigned liability is not included in the monthly obligation'; 'has been making regular on-time payments during the previous 12 months' · Checked October 17, 2026

12. According to the Fannie Mae Selling Guide, when a borrower is obligated on a non-mortgage debt but is not the one repaying it, the lender may exclude that monthly payment from the borrower's obligations and debt-to-income (DTI) ratio, even if the other party is also obligated, unless that party has an interest in the transaction (such as the seller or real estate agent); to do so, the lender must obtain the most recent 12 months of canceled checks or bank statements from the person paying, documenting 12 months of payments with no delinquencies.

    Sources 12 · B3-6-05, Monthly Debt Obligations (08/05/2026), 'Debts Paid by Others': 'is not the party who is actually repaying the debt'; 'This policy applies whether or not the other party is obligated on the debt'; 'such as the seller or real estate agent'; 'Non-mortgage debts include installment loans, student loans, revolving accounts, lease payments'; 'from the other party making the payments that document a 12-month payment history with no delinquent payments' · Checked October 17, 2026

13. According to the Fannie Mae Selling Guide, on a mortgage, guarantors and co-signers are applicants who have no ownership interest in the home as shown on the title, sign the mortgage note and have joint liability for that note with the borrower.

    Sources 13 · B2-2-04, Guarantors, Co-Signers, or Non-Occupant Borrowers on the Subject Transaction (09/02/2020): 'Guarantors and co-signers are credit applicants who'; 'do not have ownership interest in the subject property as indicated on the title'; 'sign the mortgage or deed of trust note'; 'have joint liability for the note with the borrower' · Checked October 17, 2026

14. According to the CFPB, under the federal credit reporting law, a landlord who denies your application because of a tenant screening report must give you an adverse action notice, and that includes requiring a co-signer on the lease because of that report; the notice must explain your right to a free copy of the report if you request it within 60 days.

    Sources 14 · What should I do if my rental application is denied because of a tenant screening report? (page last modified October 30, 2025): 'This federal law requires a landlord who rejects or denies your tenant application because of information in a tenant screening report to notify you'; 'Requiring a co-signer on the rental agreement or lease'; 'Explain your right to a free copy of the report, if you request it within 60 days of the adverse action' · Checked October 17, 2026

15. HUD-approved housing counselors give independent advice on buying a home, renting, defaults and credit issues, often at little or no cost.

    Sources 15 · Find a Housing Counselor: 'Housing counselors throughout the country can provide advice on buying a home, renting, defaults, forbearances, foreclosures, and credit issues'; 'they can offer independent advice, often at little or no cost to you' · Checked October 17, 2026