A co-signer is somebody who shares a credit account with you. If you don't have credit, or if you have bad credit, lenders will consider the co-signer's credit strength when making a decision. It's important that your co-signer has better credit than you do, otherwise using a co-signer won't help you at all.

Who should you use as a co-signer? As the old saying goes, start with friends, family, and fools. You'll need to find a close person who trusts you, has good credit, and is willing to stick their neck out for you. For younger people, parents are a good first choice. Ask your parents if they'd be willing to help you out and co-sign for a credit card or a loan. To sweeten the deal, offer to have statements sent directly to them so that they can see it if you should miss any payments.

If your parents cannot or will not co-sign, look to a spouse next. Your spouse's credit might help you get your foot in the door with a good lender. Recent arrivals to the United States often establish credit when their spouse (if she is a U.S. citizen with a credit history) co-signs for them. Finally, siblings might take you under their wing and sign for you.

If you can't find a co-signer in your immediate family, you'll have to branch out and find a friend to do you a huge favor. Proceed with caution; ruining somebody's credit is a surefire way to end a friendship.

Keep in mind that financial experts often warn people not to co-sign on a loan. There is good reasoning behind this. If the lenders will not give you money on your own merit, your friends and family should have reason to hesitate as well. Don't take it personally if a friend will not co-sign — some people just can't afford to take the risk.