How does co-signing a loan affect your own credit?

When you co-sign a loan, the debt appears on your credit report just as if it were your own loan. This affects your debt-to-income ratio and can make it harder to qualify for your own credit in the future. The loan's payment history also shows up on your report, so if the primary borrower makes late payments or defaults, your credit score takes a direct hit. Even if the borrower pays perfectly, the added debt load can lower your score slightly by increasing your credit utilization or overall debt burden. You are equally responsible for the debt in the eyes of lenders, meaning creditors can come after you for repayment if the primary borrower stops paying.