Wednesday, January 20, 2010

Cosigning, don't do it!

Don't cosign loans for your parents and don't let them cosign for you! You shouldn't have to anyway, lenders just want to get more people on the hook!

Even if you aren't paying back a loan that your parents took out and that you cosigned or if they aren't paying one back that you took out and they cosigned. IT STILLS SHOWS UP ON BOTH OF YOUR CREDIT REPORTS.

Even if the main endorser is responsible and makes the payments on time, it still shows the loan balance on the consignors credit. Which effects your debt to income ratio and your overall credit score!

Now that is the best case scenario. The worst case is what happens if the primary on the account is late with a payment? Or if they become delinquent? That also shows up on the consignors credit!

So a word to the wise say no to cosigning.

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