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Old 10-19-2019, 07:04 PM
 
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Know someone with bad credit conned someone into leasing a car for them with them as the co signer because their credit was so bad the interest would've been over 20%. They insist it will improve their credit score but everything was done in the other persons name-the bill, lease and insurance with them as an authorized driver. It's not their debt per say. In the meantime the other person got more credit card and heloc offers shortly after.


I don't think it will have the effect they're looking for. Also couldn't the person with good credit have their score lowered since the co signer is paying the bill. I guess if they pay on time the person with good credit gets credit for another bill paid.
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Old 10-19-2019, 07:11 PM
 
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no.
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Old 10-19-2019, 07:22 PM
 
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So it isn't a straight forward answer.

If you lack any active installment accounts, your credit score can drop. So it is possible that the addition of an installment account could help their credit. This will also count towards any debt to income calculations so if the co signer decides to get another loan the banks will consider their cosigned loan in the calculations.

You shouldn't cosign a loan unless you are prepared to pay for it. If any payments get missed it will impact everyone's credit on the lease / loan. So yes, this friend could get screwed.

You also shouldn't be listed on the title of the vehicle because if someone driving the car gets into a wreck or harms someone with the car you could be severally liable for damages in many states simple due to the fact that you are on the title of the vehicle. So your risk gets inflated by trying to protect yourself on the title.

If you want to protect yourself you need a clear agreement drawn up that transfers sole ownership of the vehicle to you in the event of a missed payment. Complete with notice clause and written notice to your friend as well as agreement that funds paid are sunk and forfeit regardless of any actual equity in the vehicle should any payments be missed and not caught up in 90 days or something like that.
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Old 10-19-2019, 11:02 PM
 
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Cosigning is stupid.
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Old 10-20-2019, 08:58 AM
 
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Should note the person with bad credit(own doing) to their credit has paid off the lease with regularity so far. Apparently one of their "expert" friends(bar stool buddies) told them making regular payments will show on their credit score. But it's not their debt.

We tried convincing the person who leased the car not to do it but they felt since it was for a new job it was important they get it done. Also the person with bad credit has taken no initiative even with a good job/salary to improve their score. Told them get any card no matter the terms buy a couple hundred dollars worth of stuff an take at least 6 months to pay it off. Even if they have to get a secured card. Nope. Life style addiction got them into trouble and will keep them there for years to come
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Old 10-21-2019, 07:01 AM
 
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Your friend shouldn't take six months to pay off a credit card. They should get a credit card and use it, but pay it in full every month. After a few months, ask for an increase in the credit line. That would help them improve their score.
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Old 10-21-2019, 07:14 AM
 
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Quote:
Originally Posted by aridon View Post
If you want to protect yourself you need a clear agreement drawn up that transfers sole ownership of the vehicle to you in the event of a missed payment. Complete with notice clause and written notice to your friend as well as agreement that funds paid are sunk and forfeit regardless of any actual equity in the vehicle should any payments be missed and not caught up in 90 days or something like that.
Except that it's leased. The leasing company owns the car.

Let's call the person who signed everything Person 1 and the person with the bad credit who's actually using the car Person 2. My understanding is that this does zero for Person 2's credit unless Person 2 also signed the lease. The fact that Person 2 is now getting credit offers, though, might imply that the lease has been added to his/her credit records. Did Person 2 actually sign the lease?

I'd be wary of the credit card offers. My first husband's finances were a mess- credit cards always maxed out, sometimes missed or late payments. We kept separate credit card accounts and that was a major reason. He got more credit card offers in the mail than I did. I paid mine in full every month and also made on-time payments on the mortgage every month. His offers were from bottom-feeder companies- high interest rates and additional fees.
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Old 10-21-2019, 10:02 AM
 
2,784 posts, read 1,179,242 times
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Quote:
Originally Posted by anoneemus1313 View Post
Know someone with bad credit conned someone into leasing a car for them with them as the co signer because their credit was so bad the interest would've been over 20%. They insist it will improve their credit score but everything was done in the other persons name-the bill, lease and insurance with them as an authorized driver. It's not their debt per say. In the meantime the other person got more credit card and heloc offers shortly after.


I don't think it will have the effect they're looking for. Also couldn't the person with good credit have their score lowered since the co signer is paying the bill. I guess if they pay on time the person with good credit gets credit for another bill paid.



"Getting a cosigner can help you gain access to the credit you need while also helping you to establish and/or build your credit."


It’s also good to keep in mind that, if the debt goes into default, it can become a blemish on the credit report(s) of both the signer and the cosigner.
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Old 10-21-2019, 10:19 AM
 
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Quote:
Originally Posted by kitty61 View Post
"Getting a cosigner can help you gain access to the credit you need while also helping you to establish and/or build your credit."


It’s also good to keep in mind that, if the debt goes into default, it can become a blemish on the credit report(s) of both the signer and the cosigner.

In this case the person with bad credit didn't get a cosigner they cosigned for somebody else with good credit. Nothing was done in the person with bad credit name. How would that raise the score of someone with bad credit if nothing was done in their name.
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Old 10-21-2019, 10:28 AM
 
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[quote=athena53;56454768]Except that it's leased. The leasing company owns the car.

Let's call the person who signed everything Person 1 and the person with the bad credit who's actually using the car Person 2. My understanding is that this does zero for Person 2's credit unless Person 2 also signed the lease. The fact that Person 2 is now getting credit offers, though, might imply that the lease has been added to his/her credit records. Did Person 2 actually sign the lease?


My bad it was person 1(good credit) who continued to get the offers. We tried to convince person 2(bad credit) apply for a credit card with a low limit and pay it off over time 3-6 months regardless of interest. Some say pay off the balance every month which is a good strategy but credit card companies want to see the ability to make regular on time payments several months in a row.



Since they consigned for person 1(good credit) their name is on the lease. But all mail, bills etc are addressed/mailed to person 1.
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