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I am having trouble understanding the difference between a cosigner and a guarantor. I see the terms used a great deal and they both seem to involve a person signing for someone else and becoming responsible for their debts if they don't pay. Are these just two different terms for the same thing -- or is there a true distinction?
In theory, there is a difference, but only for the person who has a cosigner or guarantor -- let us call that person in debt the debtor.
When a debt has both a debtor and a cosigner, both of their credit reports should contain the payment history. When a debt has both a debtor and a guarantor, only the guarantor's credit report should include the payment history.
So, if you have poor credit and want to make it better, you'll want a cosigner, not a guarantor, on your side -- or at least on your account.
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