Exceprt from The Consumer Financial Protection Bureau Blog
August 3, 2011
Written by Rohit Chopra
Credit card issuers and private student lenders have long had a presence at America’s colleges and universities. In fact, there are more than 1,000 special marketing agreements between credit card issuers and schools. But due to changes in the law and marketplace, more students are finding that they may need a co-signer to qualify for a credit card or a private student loan.
Many people assume that a student’s co-signer is a parent, but that isn’t necessarily true. So, if one of your classmates asks you to co-sign a credit card application or a private student loan, should you do it?
While it seems like an easy way to help out a friend, co-signing any loan application is a serious contract and you’re on the hook if your friend doesn’t pay up. Not paying can tarnish your credit history, and you might have to worry about. (continued…)