The stories are terribly financially. A woman in love co-signs on a motorcycle only to discover that the man is not who she thought he was. The relationship ends, but payments on motorcycle. You end up paying for a bike that she never drove. A parent co-sign on a car for a girl who runs fast with a friend (and car) in California, conveniently forgetting to make the car payments. Parents wound up the final payment. Co-sign a roommate on a laptop for a friend, the computer for school needs, but one day the roommate and the transition to the computer, never seen again. After a series of collections calls, references to a roommate, and ends the payments on a computer, they never used.
Signatures is a good deal for the lender. After two people is better on the hook to repay a loan. If you are considering cooperation signed a loan, be aware that you are responsible for repaying the debt. Just like you do not invest the money that you afford to not lose, do not cosign a loan that is you are not willing and able to repay. Remember that the only people that subscribe need people who have shaky credit histories.
If a friend asks you to cosign a loan, the answer should almost always no. However, co-signed a son or daughter is a very different situation. Sometimes Daddy’s Little Girl needs a little help getting started in life. Young people often have “thin” credit files, which means they still respectable to establish solid credit history to purchase a credit score. If you cosign, do so only if you can afford to repay the loan on your own. Make sure you read the contract carefully and keep a copy of the contract for your records.
Know that you can politely be sued if the primary borrower fails the loan. Some parents liquidation payments on cars that are not yet in their possession. This happens when their son or daughter apart by car but not to make payments. Even late payments on your credit file, that often catches a signatory surprised. Late payments on a credit record squeaky clean otherwise harmful to the credit score that late payment on a credit agreement contains history of other late payments. If a son or daughter has a shaky credit history, late payments could have a dramatic impact on the rating of the parent co-signer of the score as the primary borrower can not be affected much.
» Read more: Cosigning – Before You Cosign on a Loan