Credit gives the word to pay either by repaying it or returning those resources later. In other words, this credit is the method of making the reciprocity formal, legally enforceable, and of course, extensible to a vast group of people who are not related.
However, the resources provided may be financial or have goods or services, like consumer credit. The credit covers any form of deferred payment. Credit generally gets extended by the creditor, the debtor or lender, and sometimes the borrower.
The co-signer is the co-guarantor for a loan or mortgage along with the primary or principal borrower. He/she has the responsibility to clear outstanding payments in case of any default by the borrower. He/she may be obligated to repay the entire amount as well, in case the borrower fails to honor the loan agreement. Such defaults may also hinder his/her credit history. Co-signers are often useful in helping primary borrowers get better terms and conditions for their loans.
The concept of a co-signer or guarantor is quite common for home loans, if the credit history of the primary borrower or his/her repayment possibilities are not foolproof. They also help in getting better terms and conditions of loans, getting loans approved in the first place, and also getting better interest rates on the loan.
