Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
It means that unless this is your young child you are cosigning for, and you can easily afford to pay for the entire purchase without any stress, you are making a huge mistake.
One disadvantage to a co-signer is that their own borrowing power is decreased. Let's say you have a mortgage and two car loans and a few credit cards. And now you've taken on more debt by cosigning. Lenders look at your capacity to repay all debts you are anchored to whether you are making the payments or not. They must consider the cosigned note as something you could be making payments on next month. So if you're borderline maxed out credit-wise, you may miss out on that new boat or living room set you'd like to finance.
We co signed for each of our children's first car loans to help them build their credit. One co sign per kid, forever more, after that, it was sink or swim. I do not remember us being on the titles with them, but maybe we were. Having two names on a title is a PITA.
I can't think of any situation in which I would co sign for anyone other than my kids.
someone else says the will pay your debt if you default.. Never Ever Do This..
Quote:
Originally Posted by HappyRider
What happens when you co-sign for someone? I understand that the loan shows up on your credit report and you are responsible for payments. My question is does the loan improve the credit score of the actual owner? After all, they really don’t know who is making the payments. Is the co-signer on the title? I know it is on the registration. What does financing have to do with car registration?
We co signed for each of our children's first car loans to help them build their credit. One co sign per kid, forever more, after that, it was sink or swim. I do not remember us being on the titles with them, but maybe we were. Having two names on a title is a PITA. I can't think of any situation in which I would co sign for anyone other than my kids.
When I was buying my very first car ever (no credit history), Ford required a co-signer which was a deal breaker even tho my dad was willing to do it. So went to Acura instead which didn't require one and ended up getting a far better car that didn't break down at 10k miles. So shop around since not every lender requires a co-signer.
Would I co-sign for others? Only for family cause I know they are responsible. In fact I took out a new car loan for a relative (not co-sign) because he couldn't due to bad credit and he paid it off as promised.
Location: God's Gift to Mankind for flying anything
5,921 posts, read 13,855,132 times
Reputation: 5229
Quote:
Originally Posted by HappyRider
Same situation here. So you are saying it is not automatic that he will get the credit for paying off the loan. I haven’t looked at the paperwork. We did mention that was the intent when signing up for the lease. Would checking his credit file answer the question? If the loan is listed then it will help his credit I assume. What about insurance? Do they care about the co-signer or do they even know? Insurance is in his name.
Not sure ...
I did sign for the lease of the car for my child under 18.
And as one poster mentioned, that is really NOT a co-sign job.
I do not quite remember how it all went, but I do know,
she did not get any credit on her credit rating,
for making all those payments faithfully.
We checked afterwards years later, and nothing was mentioned
in her credit report about that particular leasing contract.
On all the other first time loans for my children,
they were all regular loans for something they wanted to buy outright.
They *did* get the credit on their rating for making the payments.
If you're under 18, you can't have a loan or really build credit, and you can't enter into contracts. If both parties are on the financing, it goes on both parties credit report, assuming both are over 18.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
