Tuesday, May 17, 2011

Do I Need a Co-Signer?

It has been a while since I have written a finance blog and since they seem to be popular (people have got $$$ on the brain), then I will indulge you.

Do you need a co-signer?
Well, maybe. Let's see. If you have never had a credit card, yes, probably. If you have never had a loan before or fear you have no credit, then yes, definitely. If you just know you have bad credit, then yes.

But a co-signer can do a world of good for you. If you pick a friend or family member that has great credit, a Bank will be likely be willing to help you! A co-signer is a great way to help you build good credit, as long as you don't skip payments or default the loan you'll be in the perfect position to sign alone next time.

Lenders want to see a good record with previous loans, if you've never taken out a loan, they don't have a reason to trust you and you'll be denied. Finding yourself a good co-signer will save you lots of wasted time and heartache. The best part of this whole deal is if you pay off your loan in time, both you and your cosigner will benefit from good credit....uh, there is a flip side to that.

Be careful who you choose YOUR loan is dependent upon THEIR credit score. And don't you want a loan? You can get good credit and you can get a car.

My Story: In 2009 my truck died driving to work (Eckert Hyundai, how lucky). I found a car in my price range (phew!) and was able to put money down and my dad was more than willing to cosign with me. I had JUST graduated from college a year ago, never had a credit card and the only thing I was toting was school loans which I was paying monthly. My credit score actually wasn't bad at all, but I had never taken a non-educational loan and no banks could trust my name, sadly they tend to assume the worst. I wish I had taken my dad's advice of getting a credit card in college, charging it for gas and paying it off monthly, but I didn't. So now I am almost paid off on a car that is under my dad's name and mine. And I'm probably improving his credit as I am mine.

ok ok, so what do YOU really need to do here?
  1. Be realistic, find a car in your budget, which lucky for you Hyundai is known for luxury wrapped in value.
  2. Find a trusting family member or friend with good credit (I picked Dad). Ask them if they'd be willing to co-sign a loan and be honest with them about the terms, the rates, the monthly payments, how much your putting down, etc.
  3. Make sure the payments are something you can handle or you will have a very angry friend or family member.
  4. Alright, test drive, apply and take home a new car.
This website is also helpful www.firstcarguide.com

No comments:

Post a Comment

flyg london Top Blogs Blog Directory