Why might someone co-sign a loan for a first-time applicant?

Co-signing a loan for a first-time applicant is often done to help the applicant establish a credit history. For many individuals, especially those who are new to borrowing or who have not yet built a credit profile, obtaining credit can be challenging. A co-signer, typically someone with a stronger or existing credit history, agrees to take on the financial responsibility alongside the primary borrower. This arrangement allows the applicant to access financing that they may not qualify for on their own, thus enabling them to create a credit history through on-time payments and responsible management of the loan. Successfully making payments on a co-signed loan can significantly boost the first-time applicant's credit score, which is crucial as they pursue future credit opportunities.