What Is a Co-Signer?

• A co-signer is an individual who can stand behind an application for credit. The co-signer vouches for the main applicant to improve the chances of approval. As is the case with a standard credit application, a landlord checks a proposed co-signer's credit history and background in addition to screening the proposed tenant thoroughly. The co-signer is usually someone with a stronger credit history than the proposed tenant. This person may have to sign a separate co-signer agreement with the landlord.
  
  

Do You Need a Co-Signer?

• A landlord commonly looks at a few key details to determine if the applicant needs a co-signer. One detail that could raise a red flag is a history of late payments. Another is if the applicant has too little or no credit history, as in the case of a student who needs a parent to qualify to rent the house. If the tenant has a previous eviction filing listed on his background check, the landlord might also ask for a co-signer in some cases. But in other cases that type of negative information could prompt denial of the rental application.
  
  

Considerations

• A person who chooses to co-sign for a home rental should fully understand the potential repercussions. If the tenant does not make payments the landlord can hold the co-signer liable for the payments due and proceed with collection activity against both the tenant and co-signer. The co-signer's credit is also affected if the tenant doesn't make payments as agreed. Also, if the tenant damages the property, that cost could fall into the lap of the co-signer. In short, the co-signer holds equal and in some cases complete responsibility for the home rental agreement.
  
  

Alternatives

• If an applicant cannot find a co-signer to rent a house, he may have other alternatives. For example, he can offer to make a larger down payment or pay several months of rent in advance. The landlord might also give the applicant an opportunity to clear up any negative information on his credit history and get caught up on delinquent accounts if that is the issue.