Thirty-eight percent of co-signers had to pay some or all of the bill because the primary borrower didn’t, according to a CreditCards.com report.
Twenty-eight percent had a drop in their credit score because the other person paid late or not at all. And 26 percent of co-signers said the experience damaged their relationship with the person they co-signed for.
Auto loans made up 51 percent of the co-signings with personal loans, 24 percent; student loans, 19 percent; and credit cards, 16 percent.
About half of those who co-signed did it for a child or stepchild. Co-signing for a friend was a distant second.
“With a 38 percent chance of losing money and a 26 percent chance of damaging a relationship, co-signing doesn’t sound like a very good bet,” said Matt Schulz, CreditCards.com’s senior industry analyst. “If you absolutely have to co-sign, then at least be aware there’s a sizable chance you’ll lose some money and/or get your feelings hurt.”
About one in six U.S. adults have co-signed a loan or credit card for someone else.
