Co-Signing for an Apartment Lease: An Ultimate Guide

Typically, when you have a good credit score and earn a decent income, you don’t need a co-signer. However, renters who are unable to provide proof of their income or have a less-than-stellar credit history may find themselves searching for a co-signer. A co-signer can be a life-saver in those situations.

1- What is Co-Signer
2- Finding a Co-Signer
3- Tips for Landlords
4- Tips for Co-signers
5- FAQs

Let’s take a look at why co-signers can be so valuable when renting an apartment.

What is a Co-Signer?

By definition, a co-signer is someone who signs a lease agreement with you even though they don’t plan to live in the property. By signing, they become partially responsible for any obligation that the tenant is unable to meet. If you’re late paying the rent or damaging the apartment in any way, the co-signer shares the financial penalty with you.

When Does Someone Need a Co-signer?

To address this question, let’s first address the underlying issue. Landlords want to make sure they receive the rent consistently and on time. They review their tenants’ financial history to get a sense of their payment patterns. When landlords aren’t sure about a tenant’s ability to meet their financial obligations, especially when it comes to paying rent on time. They may be reluctant about having those individuals as tenants.

A co-signer proves helpful in that situation and bears some of the financial responsibility in the event the tenant comes up short because they don’t make enough money, have poor or no rental history or the tenant has bad credit.

Finding a Co-Signer

By now you might have a general idea of how big of a responsibility co-signing for an apartment is. With that in mind, you probably also realize that everyone you reach out to is going to agree to co-sign on a  lease. It will only be the ones who know you well who would probably consider becoming a co-signer for your apartment. So if you find yourself needing a co-signer, you should start with someone within your close circles such as a family member or a close friend.

When asking someone to be a co-signer on an apartment lease, first explain your situation. Is it because you have no credit history or is it that you have a poor credit score because you were struggling in the past but not now? You have to be very honest because co-signing involves potential risk for the co-signer.

Persuade the co-signer by providing proof of why you’re a good risk. You may show proof of cash flow by way of providing them with copies of your payslips or bank statements.

You may offer to enter into a separate agreement with the co-signer in which you promise to repay the co-signer double (or whatever increment you deem suitable) any amount that the co-signer had to pay to the landlord on your behalf.

Tips for Landlords

• Landlords are under no obligation to allow a potential tenant who would otherwise not qualify for the apartment an opportunity to sign a lease with a co-signer. Even though a co-signer may make a potential tenant’s case more convincing and less risky. Landlords can rent apartments to anyone who qualifies.  If they find another prospective tenant who doesn’t need a co-signer to rent the apartment, they have the right to rent the apartment to him or her.
• Landlords don’t have to put their faith in anyone blindly just because there’s a co-signer involved. Landlords must make sure the co-signer is financially sound enough to bear the tenant’s financial burden in case things go wrong. For that reason, the co-signer may be subjected to a credit check and asked for proof of income.

Tips for Co-signers

Co-signing means extra responsibilities. If you’re asked to be a co-signer, don’t take it lightly. Ask these questions before agreeing to co-sign on a lease:

• Do they practice good money habits?  Have they fallen on hard times financially recently due to a job layoff or divorce or are they always in dire straits financially? Are they making enough money now to consistently pay the apartment’s rent?
• What’s the plan if things go wrong? Are you financially stable enough to sustain the financial blow if you have to pay rent on the tenant’s behalf? Will you be able to cover expenses incurred by the tenant if they damage the property? Remember, as co-signer, you will be responsible for all of the tenant’s financial obligations be it rent. Repair expenses or any other debt the tenant owes to the landlord.

Keep in mind that if you’re unable to cover any of the tenant’s outstanding debt and he or she gets evicted from the property. Your credit score will also suffer because your name is on the lease.

FAQs

Who Can co-Sign on An Apartment Lease?

Anyone who is over the age of 18 and has a good credit history can co-sign on an apartment lease. A co-signer is typically someone who is willing to take responsibility for paying rent if the primary tenant is unable to do so.

How Old Do You Have to Be to Co-Sign for An Apartment?

To legally enter into a contract, including a lease agreement for an apartment, a person must generally be at least 18 years old.

When Would I Need a Co-Signer?

There are several situations in which you may need a co-signer, such as: lack of credit history, poor credit history, insufficient income, previous eviction or foreclosure, and limited rental history.

What’s the Difference Between a Guarantor and a Co-Signer?

A guarantor is typically used in rental agreements and is responsible for rent and damages, while a co-signer is used for a variety of agreements and is responsible for the entire loan or debt. A guarantor may have limited legal liability, while a co-signer has equal legal responsibility.

How Do You Apply for An Apartment with a Co-Signer?

When applying for an apartment with a co-signer, the process is generally the same as applying without a co-signer, with the added step of providing information and documentation for the co-signer.

In Conclusion, What if you Can’t Find a Co-Signer?

You have already asked everyone you can think of to co-sign for an apartment but no one wants to do it. Don’t worry—it’s not the end of the world.

Have a conversation with the landlord and try to explain your situation. Let the landlord know why you have a bad credit score and what you are doing to fix it.  Also, tell the landlord how much money you are making. Especially if you have a permanent job and have a steady cash flow every month.  Argue that your steady income makes you a suitable candidate for the apartment.

If things still don’t work out, consider offering to pay a higher security deposit. Chances are, your landlord may agree to work with you.