Yes. In almost every case, cosigners do have to pay an application fee, and it’s charged on top of whatever the primary tenant pays. Landlords treat each person tied to the lease as a separate applicant, run a separate screening on the cosigner, and pass the cost along. The fee averages around $50, though it varies by landlord and state.
Why Cosigners Get Their Own Fee
A cosigner promises to cover rent or damages if the primary tenant can’t. That promise only means something if the cosigner actually has the credit and income to back it up, so landlords run the same type of screening on the cosigner they run on the tenant: credit report, income verification, and criminal background check. Skipping that step would defeat the point of requiring a cosigner at all.
Because credit bureaus and background-check services bill per person, the cosigner’s screening costs the landlord real money separate from the tenant’s. That’s what the fee funds.
What the Fee Pays For
- A credit report pulled from one or more of the major bureaus, billed per report.
- Income and employment verification. Many landlords want a cosigner’s income to be three to five times the monthly rent, a higher bar than they set for the tenant.
- A criminal background check run through a third-party screening service that charges its own fee.
- Administrative time spent reviewing paperwork and making a decision.
Before a landlord pulls your credit, federal law requires them to have a “permissible purpose.” Evaluating you for a housing transaction qualifies, and the landlord has to certify to the credit bureau that the report is being used only for that reason.1Federal Trade Commission. Using Consumer Reports: What Landlords Need to Know The Fair Credit Reporting Act doesn’t explicitly require written consent from a rental applicant the way it does for employment screening, but many landlords ask for it as standard practice, and some states require it.
How Much a Landlord Can Charge
There is no federal cap on rental application fees, but many states set their own limits. The rules generally take one of two shapes. Some states set a fixed dollar cap, roughly $20 to $50 depending on the jurisdiction. Others use an actual-cost limit, meaning the landlord can only charge what they actually spend on the credit report, background check, and a reasonable amount for processing time. A few states cap the fee as a percentage of monthly rent instead.
Even in states without a formal cap, landlords generally can’t turn application fees into a profit center. If the fee you were charged looks high compared with what a credit report and background check actually cost, check your state’s tenant protection laws or contact your state attorney general’s office.
When You Can Get the Money Back
Application fees are usually non-refundable once the screening runs. The clearest exception is when the landlord takes your money and never actually performs the screening. Many state laws require a full refund in that situation. Some states also require the landlord to return any portion of the fee that exceeds their actual screening costs, and a few require an itemized receipt showing exactly what was spent.
Because these rules vary a lot from one state to the next, ask the landlord upfront whether the fee is refundable and under what conditions. Get the answer in writing when you can.
If You’re Denied, You Still Have Rights
Getting rejected as a cosigner doesn’t get your fee back — the screening was performed, so the landlord’s cost was real. But if the denial was based on your credit report, the Fair Credit Reporting Act gives you something useful: an adverse action notice.
The notice must include the name, address, and phone number of the credit bureau that supplied the report, a statement that the bureau didn’t make the decision, and notice of your right to dispute anything inaccurate in the report and to get a free copy within 60 days. If a credit score was part of the decision, the notice also has to include the score itself, the range of possible scores under that model, and the key factors that hurt your score in order of importance.2Office of the Law Revision Counsel. 15 USC 1681m – Requirements on Users of Consumer Reports
That information tells you what to fix before cosigning somewhere else. Correcting an error on your credit report could change the outcome next time.
Ways to Avoid the Cosigner Fee Altogether
If paying a separate application fee and going through your own screening feels like more than you signed up for, the primary tenant may have other options that don’t require a cosigner at all:
- A larger security deposit. Some landlords will accept an extra month’s deposit in place of a cosigner. State law caps deposits in many jurisdictions, so this isn’t universally available.
- Prepaid rent. Paying several months upfront can reassure a landlord, though not every landlord will accept it.
- A third-party guarantor service. These companies act as an institutional cosigner for a fee, usually a percentage of annual rent. The landlord gets a corporate guarantee and no friend or family member has to take on the risk.
- A modestly higher monthly rent in exchange for the landlord dropping the cosigner requirement.
Each of these has its own cost. A guarantor service charges an ongoing fee that can easily exceed a one-time cosigner application fee, so add up the full cost over the lease term before choosing.