For a co-signed account with late payments, how will late payments affect the member's DTI ratio?

Late payments on a co-signed account will contribute to the member's debt-to-income (DTI) ratio because DTI is calculated based on all monthly debt obligations relative to the member's income. When assessing an individual's creditworthiness or ability to repay a loan, lenders take into account all outstanding debts, which includes any co-signed accounts with late payments. These late payments indicate a risk factor for the lender, as they demonstrate a history of missed payments that can influence the overall financial assessment.

By including these late payments in the DTI calculation, lenders ensure that they have a comprehensive view of the member's financial health and obligations. A higher DTI can indicate financial strain, possibly affecting loan approval or terms, but the primary reason for their inclusion is to provide an accurate reflection of the member's monthly financial commitments.