Definition
Someone who signs a loan alongside the primary borrower and becomes fully, legally responsible for the entire debt. The loan and every payment, good or bad, appear on both credit reports.
Why it matters
Cosigning is not a character reference, it is joint debt: the balance counts in your debt-to-income ratio and a single missed payment damages both scores. Agree only if you could afford to simply pay the loan yourself.
Example
A parent cosigns a $15,000 private student loan. Years later, applying for a mortgage, the whole payment counts against the parent's DTI, and one late payment by the graduate dents both credit reports for years.
Put it into practice
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.