I'm in the process of getting approved for an auto loan. My credit union will give me 1.99% financing if I co-sign with someone (I have clean credit history, but have no "substantial installment" loans that they'd like to see). Therefore, they require a co-signer. The dealership will offer me the loan over the same term for 2.99%. This equates to about an $800 increased cost over the term of the loan. However, the dealer doesn't need a co-signer. I can get a family member to agree to co-sign the loan, but my question is, is it in my best interest (in terms of credit worthiness) to get a loan by myself? The co-signer will simply be a guarantor of the debt, but I don't know if that shows up differently to the credit agencies compared to a co-signer who pays half the debt. Is co-sigining worth it to save the $800 or is it in my best credit interest to be the sole owner of the debt?

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    I would not burden someone else with cosigning for me over 1%. If 1% changes your decision then you shouldn't be buying this car at all.
    – quid
    Apr 25, 2017 at 18:30
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    1% doesn't change my decision and that wasn't really my question. I'm getting the car and can easily afford it either way. My question is do you build credit differently if you co-sign vs if you don't? I was simply presenting my situation that led me to ask this question.
    – J Jones
    Apr 25, 2017 at 18:53
  • You are both co-signing the loan, signing together; having a cosigner makes you both cosigners. You both agree to borrow the money and both agree to pay the money back. Both of you will have the loan reported, both of you will have payments and delinquencies reported. It's a farce that there is a "primary" and a "secondary" or "contingent" or some other word status. You should not seek a cosigner unless you HAVE to, because that person's name also goes on the title of the car. It is not worth 1% to involve someone else in something as menial as auto ownership.
    – quid
    Apr 25, 2017 at 19:00
  • I do understand that. The question is still valid, though. I know that both are co-signers. It can be seen as a benefit or a burden to the other co-signer depending on if they're looking to diversify credit or not, and how reliable the other co-signer is. It's not simply a burden. It comes down to individuals. Regardless, my question is whether or not co-signing looks different to credit agencies or not.
    – J Jones
    Apr 25, 2017 at 19:19
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    It does not. Involving someone else in ownership of your property is a burden. The other person does not benefit from your car, but the other person is on the hook for your parking tickets, car registration and any other title issues that can arise. You will need their signature to sell the car, if the cosigner dies or files bankruptcy your car can get wrapped up in their estate issues. There is more to this than credit reporting. And your question is answered by Michael C, it doesn't matter, but that should not be the only basis on which you make this decision.
    – quid
    Apr 25, 2017 at 19:24

1 Answer 1


It doesn't matter to the credit agencies if there is a co-signer or not. However, your family member will need to take into consideration if they are willing to be responsible for the loan in the event you are unable to make payments. Being a co-signer means they are agreeing to pay the loan amount. It will also impact their credit score/report, either improve it if all goes well, or destroy it if neither one of you are able to pay the loan. So to you, assuming you can pay all the payments and not default, it makes no difference. But to the co-signer, it could create a huge impact.


  • I definitely understand the impacts on the co-signer, as do they. The article you cited doesn't explicitly mention that credit agencies pay no mind to whether or not you had a co-signer on the loan. Most of the articles I did read, had similar information, but I couldn't get a clear definitive answer.
    – J Jones
    Apr 25, 2017 at 18:05
  • @JJones Ah, I understand. I will try and find something that definitively states that it doesn't matter.
    – Michael
    Apr 25, 2017 at 18:11
  • Accepting your answer because I can't find any reason that wouldn't be the case, and every article I've seen at least hints at that. Thanks for the input.
    – J Jones
    Apr 25, 2017 at 20:14

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