When a person cosigns, they sign a document with the primary borrower, agreeing to share the responsibility of a financial obligation. Should the primary borrower not be able to pay for the good, the cosigner will be responsible for paying for the good. Cosigners are often used for apartment leases, car leases, and credit card applications to provide the lender with some security that they will be able to financially recover for the good. If the primary borrower stops making payments and the cosigner refuses to make payments, the lender may legally go after both parties and as a result, the cosigner’s credit could suffer.
[Last updated in June of 2021 by the Wex Definitions Team]