Co-Signing for family or a friend

What do you do when a relative or good friend comes up to you ask you if you can co-sign for them on a credit card or a new car or... This can be an awkward situation. Of course you would like to help them out by co-signing for them but you also know that if they miss a payment that the negative mark will also go in your name too and affect your credit score. If the balance became due in full it would not just be on them but also on you. Keeping your credit good is hard enough but if anyone were going to mess it up you would want it to be you, not someone else.

If you are going to co-sign for someone do it with the mind set that you will soon have to take over these payments. If your mind set is that they will take care of their business the way they should and then they don't you don't want to be surprised with a payment that you can not afford.

Also, make it clear to your relative or friend that if they can not make a payment to be sure to let you know about it so you can make that payment.Nothing worse than them not telling you and just not paying.

It is really risky to co-sign for someone. Personally, the only people I would ever co-sign for would be my own kids but that's just me.