 TITLE: How Does Cosigning Affect Your Credit? CONTENT: What to Consider Before Cosigning\n---------------------------------\nBeyond the potential impact on your credit scores, there are many reasons that you want to think carefully before cosigning a loan.\n*   **How will cosigning impact your relationship?** Your relationship with the friend, family member or partner may be strained if they stop making payments.\n*   **You need good credit to help.** Generally, someone will ask you to cosign a loan because they can't qualify for a good offer on their own. However, you'll only be able to help if you have good credit.\n*   **Cosigning can affect your ability to get financing.** In addition to the impact on your credit scores, lenders may include the payments you cosigned for when calculating your debt-to-income (DTI) ratio. A high DTI can make getting a loan or line of credit more difficult.\n*   **You are legally responsible for the entire debt.** Cosigners are also responsible for fees and collection costs that accrue when payments on an account get missed. Creditors can sue you and may be able to garnish your wages or bank accounts to collect the outstanding debt.\n*   **A divorce doesn't end your obligation.** If you cosigned a loan with a former spouse, a divorce decree doesn't end your legal responsibility for the debt.\n*   **The negative impact on your credit scores can stick.** Bringing an account current or paying off a defaulted loan won't necessarily fix your credit. The derogatory marks can stay on your credit reports and hurt your credit scores for up to seven years. END