A creditor may require that you have a co-signer on the finance contract to make up for any deficiencies in your credit history. A co-signer may increase the chances of obtaining an approval for a used car loan if you have little credit history, or past credit delinquency.
As a co-signer, you assume equal responsibility for the contract. The account payment history will appear on both the borrower’s and co-signer’s credit reports. For this reason, use caution if you are asked to co-sign for someone. Co-signers are legally obligated to repay the contract, so make sure you know the terms of the contract and can afford to take on the payments before you agree to co-sign for someone.