Anyone who tries valiantly to break into the world of adulthood by opening a credit card, renting their first apartment or getting a car loan knows that one of the hardest questions to answer may be one of the most common: Will your parents be co-signing with you?
I’ve heard it at every major milestone — being a 20-something woman definitely doesn’t help convince anyone at first glance that I have an annual salary and credit score they can trust — and it always makes my palms start sweating.
Because I know the answer: no, my parents will not be co-signing with me. My parents don’t have the money to pay my rent or car payment on top of their own expenses if I crash and burn.
“We didn’t do it for your brothers, so we can’t do it for you,” is my mom’s common, apologetic refrain when I ask her, just in case.
So I’ve had to forge on without it. And even though it seems like the only way to get to the financial situation of your dreams, there are steps you can take to get around needing a co-signer.
Why do I even need a co-signer?
A co-signer is a person who agrees to pay back a loan or rent or credit card bills if you don’t, according to the Consumer Financial Protection Bureau. If you don’t have credit or enough income, getting a co-signer basically assures a lender that someone is going to pay them back, because someone is assuming liability for you.
It can also help you meet income and credit score requirements, and help reduce interest rates. You want a co-signer to be someone with more money and a better credit score than you. Simple enough, right?
How can I convince my parents to help me?
Although having your parents as co-signers is a very sweet deal for you, it’s a risk for them. They’ve spent decades building their credit and savings, and taking a chance on your ability to pay when they possibly still have to give you gas money to come home, is probably not something they’re eager to do. But it may be the most straightforward way to get to what you need.
How to convince them depends on your parents, but try this: First, clearly lay out your monthly income and expenses for them. Explain why you need whatever you’re getting — why that specific apartment? What are you going to use the loan for? Remind them of any extra income outside of your jobs, like scholarship money or tax refunds, or future plans to make some extra cash.
Second, and maybe opposite: appeal to their emotions.
The only time my mom ever agreed to be my co-signer on an apartment came after a clear explanation of my financial abilities and, I’m only slightly embarrassed to admit, some unexpected tears.
We were apartment hunting for my first post-college job in a city with a cost of living that seriously stretched my salary. We looked at a lot of awful places and finally found a nice one — but I missed the stringent monthly salary requirement by $50! After pouring over my budget in the car and a minor breakdown on my part, my mom did something completely unprecedented and offered to co-sign for the apartment.
I have since moved out of that place, but this is still a secret from my dad. Shh!
What do I do if they say no?
Think about if anyone else in your life would be a good co-signer, like another family member. If you’re renting an apartment with roommates, maybe one of their parents will be more willing (my brother survived his whole college career this way, thanks to his fraternity).
Get a little creative if that doesn’t work. Need a loan or a credit card? Try a different, smaller or less traditional company. An apartment? Ask if there’s any flexibility on the income requirements, or consider subletting. Make sure you’re including all forms of income (and maybe consider starting a side hustle).
If you’re able to wait a few months, really the best thing you can do is keep building your credit. The longer you have diverse lines of credit and keep the total amount you owe down, the better off you’ll be.
But if you don’t have the luxury of time, you may have to resign yourself to getting a smaller loan or a cheaper car or apartment. Maybe the lifestyle you’ve grown accustomed to when your parents were helping is not really the one you can afford.
And of course, it’s possible that whoever’s asking you about possible co-signers doesn’t really need one to give you what you want. They are probably hoping you will have one because they know it will bring your interest rate down or make you more likely to be approved. You may be able to do it without a co-signer — it’ll just cost more.
You don’t need a cosigner when you have a higher credit score. Check out Debt.com’s Credit Help Solutions to maximize your credit score.Get Started
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