Getting denied for a credit card can be frustrating, but you still have hope. A co-signer can apply with you, agreeing to pay your debt if you default. This represents a significant risk to your co-signer, however, who can be held 100 percent responsible for repayment in a default situation. You might consider your parents or close relatives for this type of help but wonder who else qualifies.
Your relationship with a co-signer has no significance for credit card companies. You may choose anyone to co-sign for you, regardless of whether the person is a blood relation, friend or business associate. Credit card companies are more concerned with whether your co-signer can pay your debt if you prove unable or unwilling to do so. Although an application may require you to list your relationship to a co-signer, a credit card company will not turn you down simply because you choose your best friend to co-sign for you rather than your mother.
Credit card companies want co-signers who prove credit worthy. You will typically need one if your credit is less than stellar, you don't have steady income, you have little income or you have no credit history. Because you represent a significant risk for a credit card company in such a case, your co-signer will need a steady income and good credit history. This way, the credit card company knows it will have a good chance of collecting any money you owe if you default on your payments.
Relatives vs. Non-Relatives
You may feel inclined to ask a family member for help before turning to friends. You might have more intimate knowledge of family members' financial situations and credit histories, which can give you insight into the most likely person to choose. Likewise, you might feel that your family members have more of an obligation or inclination to help you than a non-relative would. However, this will not always hold true, and you may have a close friend willing to co-sign. In addition, if you decide to start a business partnership, your partner might be willing to help you.
Whether you choose a relative or non-relative to co-sign for a credit card, the risks are the same. If you fail to pay the debt and the co-signer cannot do so, the credit card company can begin collection efforts against both of you, sue both of you and damage both parties' credit. This can result not only in damage to financial health but problems in your relationship with the co-signer.
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