Co-signing a lease can help a friend or relative qualify for an apartment or house rental. Landlords typically check income, credit and rental history. And if there are problems in an applicant's background, the landlord may require a co-signer on the lease agreement.
Process of Co-signing
Cosigning a lease contract involves more than making a verbal commitment. Agreeing to co-sign will require meeting with the landlord of the house or apartment and actually signing your name to the lease agreement. What's more, the landlord may require personal information, such as your address telephone number, employer name and number, and your Social Security number.
Responsibility of a Co-signer
As a co-signer on a lease agreement you commit to paying the monthly rent payment if the primary signer can't fulfill the obligation. The landlord will first seek payments from the primary signer. But if unable to recover funds from this person, anticipate the landlord contacting you for payment. As a co-signer, you can't get out of this responsibility. Only co-sign a lease agreement if you're prepared for the possibility of paying the rent.
Reasons to Co-sign
Landlords require co-signers for various reason. The person submitting an application may have a shaky credit history with a pattern of late payments, delinquencies, foreclosure or past bankruptcy. Additionally, the applicant may have broken a previous lease agreement or had an eviction on his record. A landlord may also require a co-signer if the applicant has no credit or a short employment history.
Qualifying as a Co-signer
The same way a landlord approves applicants for a rental, landlords must approve co-signers for rental applications. Qualifying as a co-signer on a lease agreement requires a history of good credit and consistent income. Landlords pull credit reports and assess the payment record of co-signers. A good credit score, no late payments and no past evictions can help qualify a person as a co-signer.
Co-signing a lease can harm your credit score if the primary signer doesn't pay the rent payment or walks away from the lease. But you can protect yourself by asking the landlord to contact you if the primary signer begins to default or send payments late. Thus, you can discuss the issue with the person before the situation escalates. Head off any problems by saving the equivalent of one month's rent payment just in case the person can't make a payment.