A line of credit or credit card is useful when you're short on cash during an emergency. But if you're not careful, you run the risk of developing credit problems and a bad credit score.
Applying for too many credit cards results in excessive credit inquiries, which can reduce your credit score. What's more, having several thousands of dollars of available credit increases the temptation to spend, and you might acquire debt that you're unable to pay off.
Paying your credit card and other loan payments on time each month helps you keep an acceptable credit rating. Failing to do so by paying bills late or skipping payments results in extra fees and a bad credit rating.
Effects of Co-signing
Co-signing loan documents can help someone establish or rebuild his credit history. However, you are liable for the debt if he stops paying, and your credit score will suffer if he sends in late payments or misses a payment altogether.