Yes, having a co-borrower on a SoFi Personal Loan can affect the co-borrower's credit score. Here’s how:
Hard Inquiry: When the loan application is submitted, SoFi typically performs a hard credit check on both the primary borrower and the co-borrower, which may slightly impact both credit scores temporarily.
Loan on Credit Report: Once approved, the personal loan will appear on both the borrower’s and the co-borrower’s credit reports as a shared debt. This can impact credit utilization, a factor in credit scores, which could affect the co-borrower's score positively or negatively depending on how it impacts their overall debt profile.
Payment History: The co-borrower is equally responsible for payments, so on-time payments can positively impact both parties' credit scores. However, if there are any late or missed payments, this will negatively impact both scores.
Debt-to-Income Ratio: Adding this loan to their credit profile may increase the co-borrower’s debt-to-income ratio, which lenders often consider in future credit applications.
Overall, a co-borrower's credit score can benefit from responsible repayment of the loan, but it also bears the same risks as the primary borrower if the loan is not managed well.
