- Anybody can co-sign on your credit card but not everyone qualifies to be a co-signer. Lenders usually look at the credit history and finances of a borrower and co-signer. If the primary borrower does not meet the lending standards of the bank, it will consider the reduced risk that a co-signer brings to approve the application. Some of the most common types of co-signers are spouses, relatives, friends and close co-workers.
- You should warn any co-signer about his duties to the account. If you default on the debt, the co-signer may have to pay the tab if the lender pursues him for the loan. Also, negative and positive items appear on the credit reports of all borrowers on an account. Thus, a non-relative may be more wary of co-signing a credit card after learning of his responsibilities. Even close relatives, such as a parent, often decline the request to be co-signer because of the high risk.
- Having a co-signer on a credit card is just as big a risk for you as it is for the other borrower. The co-signer has the same rights to the account as you. This means the co-signer can make purchases on the account and if he chooses not to pay the balance, you must pay it. If a non-relative is on the account, it might be easy for him to evade you if you ask him for repayment.
- If you cannot acquire a credit card on your own, this is a sign you may be a risky borrower. Consider becoming an authorized user on another person's account to build your credit rating. The primary borrower can give you your own card and remove you from the account much more easily than if you were a joint borrower, and you are not responsible for the bill. You should have source of verifiable income if you are under 21, because the 2009 Credit CARD Act of 2009 requires this for a lender to approve you for an account. If you have some income, you may qualify for a starter credit card, such as department store account or credit card secured by a savings account, on your own.
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