I just purchased a 21,000 car that I will payoff in 5 years. My brother in law wants to purchase a similar car but since he would always pay everything in cash, he has little credit and was told he needed a co-signer to qualify.
If I co-sign for him would that hurt me when I apply for a house 1-2 years from now?
Also once his credit builds up can he take me out of the loan down the road?
thanks
2007-03-04 09:49:54 · 4 answers · asked by Anonymous in Business & Finance ➔ Credit
It would lower your credit score because you are on a new loan. However, if you trust him and he pays his payments on-time, after a while he can build up credit and refinance his car on his own and take you out of his lown. Then, it will boost your credit.
Checkout http://www.howtoestablishgoodcredit.com/Credit_Articles/index.php
There are lots of articles there, related to your question, which you can find useful to boost your credit
2007-03-08 07:13:15 · answer #1 · answered by Anonymous · 0⤊ 0⤋
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2016-09-26 10:29:52 · answer #2 · answered by ? 3 · 0⤊ 0⤋
First DO NOT Cosign for anyone. Unless you are 100% sure that person will pay the loan on time for the length of the loan. If you are really worried about him paying on time this would probably require you to "babysit" him and make sure the payments are made.
If he stays perfect and never is late it probably won't hurt your credit score. However, it still goes against your debt to income ratio and this will hurt you as it shows you are on the hook for more money.
Now if he has been late once or twice or worse it will hurt your credit score. If he gets to the point where they are going to reposes it will hurt a lot more. However, if you do Co-sign for him the only way he could get you off the loan is to refinance it under his name only.
2007-03-04 10:34:51 · answer #3 · answered by OC1999 7 · 0⤊ 0⤋
In 2 years, if all payments for both auto loans have been made in a timely manner, it shouldn't hurt you in applying for a mortgage.
If either you or your brother in law have any late payments, that will definately hurt.
The only way your brother in law can take full responsibility for the loan, after his credit improves, is is he refi's the loan. Once you sign as co-signer you cannot be removed from "that" loan without it being refi'd.
Even though it is your bro in law, be absolutely sure you want to put your credit on the line for him.
2007-03-04 10:02:33 · answer #4 · answered by echo 7 · 0⤊ 0⤋