In one of my books (Start Fixing Your Credit Now!) I discourage people from co-signing for other people. A couple of comic examples are: Honey, Bill & Jill haven’t been working long, why don’t we co-sign for their house? Sweetheart, my parents co-signed for me and I made all my payments on time. This is what I call justification thinking. People justify to themselves why they should co-sign for someone else.

I have dealt with a few dozen cases in which people co-signed for someone else. Guess who we were talking to about paying off the debts? In every case it was the co-signer. Here is what most of them said. I didn’t think Danny would stop paying on his credit card. I would have never signed for that bill is I thought that George and Susan would stop paying their house note.

I have also known friends that have co-signed for their children. Only one of them followed through by paying his house back to his mother ahead of time. My friend was shocked. Her other two children did not shock her. Unlike the previous examples, they are not paying their debts on time. Please have an ear to hear what I am about to say.

The common reasons why people need a co-signor is that they have bruised or bad credit and they have just started their first full-time job or have very little credit established. When people ask should they co-sign for someone, I tell them to put their feeling and emotions aside. Here are some questions I give them to ask a person they are considering helping. Why is your credit bad? How long has your credit been bad? Why can’t you wait to get credit 6 to 12 months on your own? Do you really need this credit now? We will finish up when we get to part 2 in a few days.