Creditworthy by Association: The Incidence and Correlates of Access to a Cosigner

ABSTRACT Credit is a necessary tool for consumption and wealth accumulation. However, credit invisibility, a low credit history, or none at all, diminishes its power. Some credit‐invisible borrowers recoup credit's power through a cosigner, someone who guarantees a loan to unlock lower interest rates and favorable terms. While the benefits of a cosigner are well known, less is known about the distribution of access to one. If access to a cosigner is distributed along existing social hierarchies known to shape access to credit unequally, then it may have implications for understanding how stratified credit markets are reproduced. Using data from the Year 15 follow‐up wave of the Future of Families and Child Wellbeing Study (FFCWS), the most recent wave with information on cosigning, we examine the incidence and correlates of access to a cosigner among primary caregiver mothers. We find access to a cosigner is concentrated among White, economically advantaged, and financially included mothers who receive financial support. Our findings indicate access to a cosigner may be a financial resource that compounds existing economic and social advantages.