Who would make an ideal cosigner? Of course, someone with a good or excellent credit history is the perfect person to cosign for you. Perhaps you may ask your parents or a relative to be a cosigner for your car loan. Remember, it is important that your cosigner is aware of his/her responsibilities in case of a problem.
If you have plans to apply for a car loan yet with bad credit, finding a co-signer can help your application get approved. Many lending companies would grant a bad credit car loan provided that a co-signer is willing to guarantee the repayment. Thus, in case the applicant himself cannot keep up with the repayment of the auto loan, the co-signer can step over and continue the repayment.
Bad Credit Auto Loan Cosigning Who would make an ideal cosigner? Of course, someone with a good or excellent credit history is the perfect person to cosign for you. Perhaps you may ask your parents or a relative to be a cosigner for your car loan. Remember, it is important that your cosigner is aware of his/her responsibilities in case of a problem. It is also important to find someone who is capable of shouldering repayment obligations just in case you fail to keep up with the repayment. Sometimes, unexpected circumstances may force you to default on your loan payments and your cosigner is the only person who can help you.
Remember, if either you or your cosigner fails to shoulder the repayment responsibilities, your lending company can take legal action against both of you. Protect your Cosigner from Liability Another important factor to consider is your cosigner’s credit history. Once your auto loan has been approved, how you handle your repayment can also affect your cosigner’s credit history. To protect your cosigner credit, you must do your best to submit your loan payments without delays.
What if you can’t submit your monthly car loan payment on time? First, call up your car loan lender and ask for an extension of your payment deadline. If your lender refuses to give you an extension, it’s best to let your cosigner know right away about your situation. Perhaps your cosigner may volunteer to lend you your loan payment for this month. Otherwise, if no positive action has been done either by you or your cosigner, the late payment could hurt both your credit scores. Clearly, asking someone to cosign for your loan is serious responsibility.
Although your cosigner is accountable for the account, you should do your best to protect your cosigner’s credit. Make sure that you are aware of you payment schedules and always be prepared with your payments. Being consistent with your payments does not only protect your cosigner’s credit, it also helps you to rebuild your bad credit. After a few months of consistent payment to your auto loan, you should be able to see an improvement in your personal credit history.
Once you’re done with your car loan repayment, you can enjoy good credit history once again and be able to open new accounts without the need for a cosigner.
Article Tags: Auto Loan, Credit History, Cosigner’s Credit