When you’re applying for credit, sometimes you need a little extra help to get approved. If you don’t meet the credit requirements, or you’re working with a lender who has strict criteria, adding a co-applicant or co-signer to your application may be your best bet. But what’s the difference between these two options, and what are the credit score requirements for each? In this blog post, we’ll take a closer look at co-applicants and co-signers, and what you need to know about their credit scores.
What is a co-applicant?
A co-applicant is someone who applies for credit with you, and is equally responsible for paying off any debts or loans. This could be a spouse, partner, family member, or friend. When you apply for credit together, the lender will consider both of your credit scores, income, and other factors. This means that if one of you has a low credit score, the other person’s higher score could help balance it out.
What are the credit score requirements for co-applicants?
The credit score requirements for co-applicants will vary depending on the type of credit you’re applying for, and the lender. It’s always a good idea to check with the lender before you apply, to make sure that they’re willing to consider a co-applicant, and what their credit score requirements are. Generally speaking, the higher the credit score of the co-applicant, the more likely you are to be approved for credit.
What is a co-signer?
A co-signer is someone who agrees to take responsibility for your debt if you’re unable to pay it back. This could be a parent, relative, or friend. When you apply for credit, the lender will look at your credit score first, and if it’s not high enough to meet their requirements, they may ask you to find a co-signer. The co-signer will need to have a higher credit score than you, and be willing to make payments on your behalf if you’re unable to do so.
What are the credit score requirements for co-signers?
The credit score requirements for co-signers will again vary depending on the lender and the type of credit you’re applying for. Unlike co-applicants, co-signers are generally required to have a higher credit score than the primary borrower in order to be approved. In some cases, they may need to have an excellent or near-perfect credit score to qualify. It’s important to remember that co-signing a loan or credit application is a serious responsibility, and it’s not something that should be taken lightly.
Adding a co-applicant or co-signer to your credit application can be an effective way to improve your chances of getting approved for credit. However, it’s important to understand the credit score requirements for co-applicants vs co-signers, and to carefully consider the potential risks and benefits of each option. Before you apply for credit, take the time to research your options, and make sure that you’re working with a reputable lender who can provide you with the information you need to make an informed decision. By doing so, you’ll be well on your way to achieving your financial goals and securing the credit you need to build a brighter future.