Credit History

[andrey]

I personally have a really good credit history. A friend of mine really needs to get a loan from his bank to get a car and asked me to co-sign for him. If for some reason he won't be able to make payments on time, will it affect my credit history or just his ?

 

[Rage187]

Yes you will be held responsible and your credit will reflect it..

he has bad credit for a reason...

 

[luv2chill]

if he defaults on the loan, it becomes your loan, and if you don't pay it, absolutely it will affect your credit history.

IMHO I strongly suggest not co-signing for friends, even if they're good friends. Such things usually do more harm than good and can create a lot of unneeded animosity.

l2c

 

[Emulex]

Correctly:

If he does not pay the loan, they can sue you, ruin your credit, take your money to cover the loan.

A co-signer is 100% as liable for payment.

BAD idea. Unless you are married to this person, i wouldn't co-sign squat.

 

[Tripleshot]

don't co sign for family either. They will welch faster than anything,and you can't beat the hell out of your family.(or at least most families don't.)

 

[ToBeMe]

Tell him to go out and get his own loan! A very good friend of mine works for a loan Co.........He's always telling me it's a joke these days! If you want a loan, be it for a house, car, boat, whatever, there's always a way to get it according to him!

 

[WombatWoman]

In 1977 I cosigned on a loan for a lovely Kawasaki motorcycle, since my then-boyfriend's credit history was insufficient. He made two payments and disappeared into thin air, and I had the privilege of continuing for two years to pay for a bike that I could neither ride nor sell, since the ratfink took the Kawasaki with him when he left town. I could have defaulted on the payments, of course, but that would have damaged my credit history considerably, and would also have been a dishonorable thing to do.

My advice: Never, ever cosign on a loan unless you are willing to consider the full amount a "gift" later on.

 

[RossMAN]

The only person I'd ever co-sign on a loan for is family and that's only if I knew they'd make the payments. Car loans are usually anywhere from $8,000 - $25,000 so if you're ready to assume your friends payments if they happen to lose their job or gets lazy then GO FOR IT! But as everyone else here has said it's a bad idea.

 

[Muadib]

I've had 2 friends ask me to co-sign for them. The first one, who rarely asked me for anything, needed a car to get a better job. His brother trashed his credit by getting a card in his name and never paying it. He was a porter for a donut shop at the time. I did it for him, and he paid the loan off almost a year ahead of time after getting a better gig. The other dude needed to borrow twenty to fifty dollars from me at least once a month. It took him over 2 years to pay me back a $500 loan. To top it off, he made 10k more a year than I did. Needless to say when he asked, I told him no way.

Which profile does your friend fit?

 

[RossMAN]

Muadib - That was nice of you to help out your friends like that. I remember when I was in a jam and really wanted a computer in 1994. So a friend co-signed a $1,400 line of credit at Computer City with 12 months same as cash. I had it paidoff in full within 90 days and it helped me build enough credit to make many more purchases later on. Even though andrey's friend may fit the first profile, there are always unforseen circumstances which could prevent them from making payments, like loss of job, injury, etc.

 

[andrey]

I totally agree with all of the messages above, and although I didn't want to, I will have to let my friend know not so good news for him. I personally wouldn't mind paying even entire loan for a family member. Heck, I would even buy my sister a car if she would ask to. With a friend of mine, whom I see about once a week, is a different story. I just was not aware what co-signing will ruin my credit history as well. Thank you once again for the head's up.

 

[RossMAN]

andrey - I'd do the same thing, if my family needed anything I would put them first and foremost. Besides it doesn't sound like you're that close to your friend and don't see them that often. I know it will be a letdown for them but you're putting your entire life's credit rating at risk by co-signing for your friend.

 

[bozo1]

Even things like him paying late occasionally could and probably would show up on your credit. He may have the best intentions, but you never know what may happen in the future - job loss, illness, etc.

 

[smartt]

There may even be circumstances beyond your friend's control that would leave you holding the bag. If he can't get a loan on his own, for whatever reason, this should be warning enough for you.
I don't even think co-signing, outside of immediate families, should be allowed. Wonder how many broken friendships are family feuds have been caused by this? I can think of a few that I've experienced first hand.

 

[Muadib]

RossMAN
Thanks! It all boils down to how much you trust a person. I knew him for about 10 years at the time, and I knew him to be a man of honor. Much like yourself.

smartt
How can you tell someone what they can and can't do with their own credit history?

 

[RossMAN]

<< RossMAN
Thanks! It all boils down to how much you trust a person. I knew him for about 10 years at the time, and I knew him to be a man of honor. Much like yourself. >>


No problem, there's just certain friends you know that you can trust with lots of money and others who are just flakes.