Student Credit Cards and Co-signing

When co-signing for a college student’s credit card, what important pointers should you remember? In this article, let’s discuss some tips for those who are planning to co-sign for a friend, a child, or a relative.

How Co-signing Can Affect Your Credit Score

By agreeing to co-sign for a student credit card, you accept the accountability of repayment in case the student defaults or fails to keep up with his/her payments. As a co-signer, how the student credit card holder handles his/her account can also affect your own credit history. Consequently, if the student is frequently late in submitting payments to his student credit card or if he/she has incurred an exceptionally large balance in her account, your own credit score can also drop by a few points.

To protect yourself from that possibility, it’s important to that you also receive updates of the student credit card you co-signed for. The student credit card company must send you notices regularly, especially if the student has been late with his/her recent payment. If you do not receive any notices from the credit card company, take the initiative to call the issuer and ask for an updated report.

The student who asked you to be a co-signer must also volunteer in updating you about his/her account. Thus, you can take action right away in case the student will not be able to submit his/her payment on time. For instance, you may volunteer to lend the student the money so he/she can submit his monthly payment on time.

Know the Person you’re Co-signing For

If you’re a parent co-signing for your college student, you should know whether or not your child is ready to handle his own credit card. If this his/her first time to own a credit card, it is your duty to teach your child about the proper use of credit cards. See to it that your child is aware about the consequences and responsibilities of being a credit card holder.

If you’re co-signing for a friend or a relative, it would be smart to check on the person’s background first before agreeing to co-sign. Can you trust this person? Do you think he or she is capable of managing debt? Has this person been into bad credit in the past? If yes, what were the reasons? Was it due to negligence or uncontrolled spending?

Bear in mind that acting as a co-signer involves risks. If the person you co-signed for defaults on his/her debts, you would have to take over the responsibility of debt repayment. You should also be open to the possibilities of unexpected or unfortunate circumstances. Consequently, being a co-signer means being prepared to take over the account you co-signed for.

About the Author

Samantha Wilson is a consultant for credit cards for students. For years she has written student credit cards articles that would help build student credit.
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