Sometimes, doing a good deed can be disastrous. If your heart tells you to co-sign on a loan, let your head prevail.

A new survey from CreditCards.com found that 38 percent of co-signers had to pay some, or all, of the bill because the primary borrower did not. Nearly 30 percent experienced a dip in their credit score because the other person paid late or not at all. Finances and relationships were damaged.

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Co-signing is risky, but if you feel you must, protect yourself.

  • Get the details. Read the agreement together to make sure you both understand what you’re signing. “This also enables you to discuss expectations with the primary borrower. You can draft a separate, but parallel contract that discusses the expectations and obligations of each party, as well as any stipulations,” says Laurie Samay, a certified financial planner with Palisades Hudson Financial Group in Scarsdale.
  • Pay attention. Both of you should request online access to loan statements and confirm each month that payment is made on time. “If you vigilantly monitor payments, you can step in if something goes awry, says Samay.
  • Check your credit score on a regular basis. “If you notice a late payment, contact the other person on the loan and work through the situation,” says Rick Reustle, an administrative vice president at M&T Bank in Melville.
  • Have an exit strategy. Up front, you and the primary borrower should agree to refinance the loan or close the credit card once his or her credit score improves or income increases. Says Samay, “There is no need to stay on the loan once the borrower can stand on his or her own.”