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Millennials Have No Problem in Asking Parents to Cosign on a Loan, Survey Finds
Wednesday, April 2, 2014 6:55 AM

The majority of Millennials are familiar with cosigning, and have tapped a cosigner in the past, reveals new survey by Experian Consumer Services. In fact, nine in 10 Millennials are familiar with cosigning and nearly two thirds used a cosigner in the past.

The survey also finds that Millennials look to their parents to cosign on their behalf. Three in four Millennials report they would ask their parents to cosign for them in the future, and 77 percent say their parents likely would agree. Even though they feel confident they could keep their accounts in good standing, 87 percent of respondents say they would consider how their financial actions might impact their cosigner’s credit.

Survey results indicate that two in three Millennials needed a cosigner in the past, which most often was for college loans (35 percent) or residential leases (32 percent). Other reasons Millennials need a cosigner include car loans (19 percent); legal agreements for credit cards (17 percent); car leases (11 percent); or home loans (6 percent).

Of respondents who reported having used a cosigner for a loan or a lease, the majority handle the responsibility of credit well, paying off their account in good standing or keeping it active in good standing. The net total of contracts reported in bad standing due to late payments, with missed payments or in default is 8 percent.

Of respondents who reported an account in bad standing:

  • Thirty-two percent of their cosigners made payments when the primary signer could not
  • Seventeen percent of their cosigners did not find out about the problems right away
  • Twelve percent of their cosigners’ credit score was negatively affected
  • Seven percent of cosigners took on the debt once the primary signer faulted

Fifty-four percent of respondents admit that they would worry about negatively impacting their cosigners’ credit scores. However, 91 percent expressed confidence that they could keep accounts in good standing and not affect their cosigners’ credit scores negatively.

Experian Consumer Services about how they can Live Credit Confident™ when cosigning.