Inheriting Good Credit: Race, Socioeconomic Status, and Cosigning Relationships in the Transition to Adulthood

One in six adults will cosign a loan for a family member or friend with a poor credit history. When these loans are repaid, the primary borrower inherits their cosigner’s good credit – an unearned financial boost. When these loans default, however, both parties experience damaged credit histories. Sociologist Asia Bento and economist Vellore Arthi will examine how access to creditworthy cosigners and the impact of cosigning on primary borrowers and their cosigners differs by race and socioeconomic status. They will analyze data from the University of California—Consumer Credit Panel for their study.