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OT co-signer

My boyfriend and I have been together for 1 1/2 years. He has horrible credit and has asked me to cosign for a new car for him. I am not sure if this is a good idea or not. What is your advice?

Fri. Nov 24, 8:43am

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Personally, I really, really wouldn't. I don't make assumptions about your relationship, but this sort of thing is almost always a very bad idea (and I have the assumed debt to prove it). It sounds like you know this anyway, or perhaps I'm reading between the lines a bit. I know it's hard to say "no" to someone you're involved with, but he earned that bad credit for himself.

Friday, November 24, 2006, 9:34 AM

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don't do it- from experience- nuff said

Friday, November 24, 2006, 10:58 AM

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co-sign with the knowledge that YOU will have to make the payments if he doesn't (track record not that good) and that you will be tied to him for the length of the loan, even if the relationship goes sour. OTOH, i am a formerly-bad-credit person - went thru illness and unemployment in my 20s - and my husband cosigned on my car before we were married and it was just what i needed to get my good credit back.

Friday, November 24, 2006, 11:40 AM

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Friday, November 24, 2006, 12:22 PM

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my boyfriend co-signed on a car loan for me a couple of years ago . . .and we are still together and i pay my car payment on time every month. i didn't have bad credit-i just didn't have enough credit-my boyfriend and i hadn't been together that long when he offered to do this but he trusted that i wouldn't screw him over if things went bad between us down the road. what type of person is your boyfriend? do you trust him? does he follow-thru with things? is his bad credit because of things he didn't take care of a while back or because of irresponsible behavior recently? you know in your gut what the right thing to do it. if you trust that he'll always pay then do it. if you can't trust him to even pay his cell phone bill-then don't!!

Friday, November 24, 2006, 1:59 PM

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As with the above posters, I have personal experience in co-signing for a boyfriend. I have no doubts about the strength of your relationship, but please don't confuse your relationship with the financial constraints of co-signing. He can ask a family member (and if they say no, then really, what more convincing do you need?)
You mentioned that your boyfriend has terrible credit in the first place. Well, he managed to get himself into that situation, and changing that behavior is very difficult. Your relationship will become one where you will be watching his spending very closely, and question his finances...constantly reminding him of his obligation to make the car payment, etc. Since his credit is already in the toilet, one late payment will reflect poorly on your credit.
All I am saying is that my credit went from A+++ to much less than that after co-signing for a store credit card, and that wasn't even a car loan!
One more you have the cash on hand to cover a car loan default? If not, then don't take on that responsibility.
Obviously I feel very strongly about it, and I hope that you don't ever have to give the same advice to someone else down the line.
Best of luck

Friday, November 24, 2006, 2:00 PM

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make yourself aware of a few things, such as does your boyfriend maintain friendships with previous girlfriends? does he speak about past relationships in a good way? can he afford the car? will car payments depend on his mailing out a check or will they be automatically deducted from his account? what other financial responsibilities does he currently have? is he on time with them?

also be aware that even if he is LATE with a payment, this goes on YOUR credit report. if he is late often, this could affect your chances of securing a loan for yourself for a car or home or credit card or even your auto insurance rates (some states link your credit report with the cost of your car insurance). and, this is a worst case senario, if you break up in a few months and it is nasty or he feels resentful, he could take the car, move and leave you as the responsible party. and how will this deal affect your decision to break it off with him if you find your are no longer happy in the relationship? why can't he ask someone else? isn't there someone he has known longer than he's known you that he could ask for help? i find it curious that you are his only hope....

Friday, November 24, 2006, 2:16 PM

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I would not even co-sign for a sibling, or parent, or anyone. I think it is the worst thing you could do. You need to protect your credit, and you are the only person who can do that. DON'T DO IT!

There are programs avaliable for people who have bad credit to buy a car, they may end up paying a higher intest rate, but it could help them get their credit back online. Help him look into those programs.

Friday, November 24, 2006, 2:54 PM

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Are you willing and able to pay back the loan. Why does he have bad credit. I will pray you get guidance

Friday, November 24, 2006, 8:03 PM

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Op here

He did look into a program for people with bad credit and got a used car (2000 for $15,000) the car has had major problems since he bought it. Now he either has to put $1000 into it to fix it and hope for no more problems or get a new car. His family has bad credit too, they have tried to help him in the past but their credit was not good enough. I have not decided what to do. I want to help so he will stop having to ride the bus. I think our relationship is good and strong. Even if we were not together I think he would make the payment.

Friday, November 24, 2006, 8:06 PM

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at this point it's not about him...

... can YOU make the payments if something happens? maybe nothing will, maybe you will be together for a long time and maybe his credit will improve BUT you can't count on that. soooo if you want to do it (and any of us in love could understand that) just make sure it's not going to ruin your credit, too!

Friday, November 24, 2006, 8:17 PM

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Do you know that if he ruins your credit rating, it can keep you from getting a new job? or even a place to live? Landlords, apartment complexes, mortgage lenders, new employers - they all check credit ratings.

Friday, November 24, 2006, 10:21 PM

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i get the impression that you asked that question here expecting to gain support in favor of cosigning for him.

Saturday, November 25, 2006, 11:14 AM

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no no no!

Bad idea. I've known several people who have done this and ended up being screwed. I know it probably seems like you'll be together forever at this point --- but it is amazing how quickly that can change.... and you'd be stuck with a worse credit rating. Be careful - you always need to think of NUMBER 1!

Saturday, November 25, 2006, 1:54 PM

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If you can't afford to just give him the money, with no expectation of getting it back, then you can't afford to co-sign.

Credit is so liberally offered now that no one should step in where the commercial lenders won't go. I agree with the poster who said never cosign for anyone at all. If you have the financial and emotional stability to withstand the loss, give the money yourself - call it a loan if you wish, and get a promissory note, charge interest, report the interest paid to you on your taxes as income - but plan on not being repaid - if you are fortunate enough to be repaid, wonderful - more likely you won't be.

Saturday, November 25, 2006, 6:55 PM

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been there done that


Sunday, November 26, 2006, 1:34 AM

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how does a person with bad credit ever establish it again, if no one is willing to co-sign for them? Isn't it just a cycle? Once you have bad credit you can only buy used cars and then at a high APR, which you have to put more money into. It just seems there is little help for peole with bad credit.

Sunday, November 26, 2006, 8:21 AM

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No don't due it. You don't need your credit effected by him. There are places he can go to get help with his credit to try and correct the past.

Sunday, November 26, 2006, 8:17 PM

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I have worked in banks many years. My first advice is don't do it. Relationships even after a year and a half go sour and things like this could ruin you... with that said if you still are considering it.

1) Make sure the car he's getting is a good enough deal that if you had to repo it and sell it you could.
2) Make all the payments yourself. Have him pay you and you'll pay the bank. Bank's don't normally call the cosigner until the loan is at LEAST 30 days late, but generally not till it's 60-90 days late. You want to know ASAP if he can't or won't make that payment so you can make arrangements to get it paid.
3) Evaluate your finances if you do it and he stops making payments you may need to make the payments for a few months until you can sell the car, you may need to take him to court, you may need to pay money that is upside down to get out of the loan... are you in a financial situation that this wouldn't ruin you if this happened.

As long as you are fully prepared to take over the payments, until you can legally sell the vehicle (even without his permission which could take a court order) then go ahead, if you are telling yourself you'll be fine this will never happen, then don't sign he'll need to ride the bus longer.

Sunday, November 26, 2006, 8:47 PM

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This probably sounds harsh, but I think you're making excuses for him and for yourself. A new car is a luxury, not a necessity. Better used cars cost more than crappy used cars, true, but I think the idea of co-signing to rebuild credit doesn't fit into this picture. People with totally bad credit still have some options open, but it takes time and financial discipline - like saving money, starting with a very low credit limit (and probably a collateral savings account), and making every payment on time month after month after month - to get back to where the mainstream lenders will do business.
And I'd be twice as cautious, knowing that his family has a history of mismanaging money. I'm not telling you to dump him because of that, but prepare yourself to be the clear-thinking, disciplined money manager who sees that all the financial obligations are met.

Sunday, November 26, 2006, 11:24 PM

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are you planning on being with him for the rest of your life?

Monday, November 27, 2006, 8:52 AM

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Tuesday, November 28, 2006, 11:23 AM

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There's a reason why the bank needs a co-signer; based on his history, he hasn't paid back his debt on time.

You will get stuck paying this off. Promise.

Tuesday, November 28, 2006, 11:41 AM

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I agree with the poster who suggested that you cosign, and then you make the payments to the bank, and he makes payments to you. First, it'll make you responsible for paying on time, which makes you responsible for the good standings of your own credit, not him. And second, assuming he loves you, he will likely feel more obliged to pay you than he would to pay the bank, especially since if he does not pay you, it'll likely cause arguments in other areas of his life - i.e. sex and social time.

Before you go through with it, though, draw up specific terms with your boyfriend, and write them down so that you're both clear. Make it more official than you think it needs to be. Specify by what date he is to give you the money, the exact amount that he is to give you, and how you'll handle an eventual sale or trade-in if that happens before the loan is completely paid off. Also specify what repercussions will happen if he fails to pay you on time - will you charge him a late fee? Will you withhold something like sex or cooking, or letting him see you? And if you foresee fights arising every month at the time that he needs to pay you money, then don't do it!

However, I'd only do this at all if you plan to be with him forever. And the only reason that I'd do it is that if you can help him to rebuild his credit, it will help you in the future if you decide to buy a home together, etc.

Tuesday, November 28, 2006, 2:40 PM

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The way we had talked about it is that it would be a direct withdraw from his bank and into mine. That way there would be no discussion about it and it would be just like a regular payment. However, now I am thinking the bank that does the laon may want to just do a withdraw from his account straight to the loan. Not sure how that works. I do all my bills using online bill pay so I don't have to remember the due dates and stamps, etc. The other thing I am not sure about is insurance. If I cosign do I have to pay insurance on hi car too or just him?
We do plan to be together forever. He is going to college full time and working a good full time job in his words "to get everything taken care of so he can make me his wife someday". I love him dearly but I have to admit that sometimes I feel like he puts having fun before his reponsibilities and as a bore as it may seem, bills come first in my book.

Tuesday, November 28, 2006, 2:54 PM

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as an alternative, you could buy a used car with your own credit and not involve him at all. then in order to drive it, he would have to pay you on time and maintain the car. if he fails to do so, selling the car will be much easier with all the paperwork in your name. it may not help his credit, but there are other ways he could help his credit without the risk of ruining yours. for instance, he could get a secured credit card and make one small purchase a month, then pay it off immediately. eventually, this will make a big difference on his credit report.

Tuesday, November 28, 2006, 3:34 PM

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Don't do it

Tuesday, November 28, 2006, 4:11 PM

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I tend to shy away from used cars. I have had two and with both I frequently had to make a monthly bank payment and a payment to the mechanic each month. If you get a more expensive used car, it is never worth much when you are done paying it off. If you get a cheap used car your money goes to the mechanic. I am on my 3rd new car, have had 0 problems, and always traded them in at about 3-4 years using each one as a small downpayment because I owed less than the car was worth. I guess I am more of the one saying get a new car, than he is.

Tuesday, November 28, 2006, 4:12 PM

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NO, NO, NO! Don't do it. Let his parents do something like that. You don't want to ruin your credit if he isn't responsible. It says something that he has horrible credit. There are lots of car places that will help people who have BAD credit. Don't risk it, I can't stress enough what a bad idea that is. If you cosign and he doesn't keep up with the payments you then become responsible and it will also go on your credit.

Tuesday, November 28, 2006, 5:09 PM

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Oy I have a lot to say about this. First he bought a USED car for $15,000, what sort of car was this, did he research it before he bought it? It is clear he isn't responsible and he comes from a family that isn't responsible. Only you can protect yourself and get the things in life that you want. And most of what we want requires us to have a good credit history. If you co-sign are you in the position to pay the payment if he doesn't? Its a stupid and terrible idea. A lot of stuff depends on credit reports, home loans, car loans, credit cards, student loans, renting, new jobs, car insurance, its just to risky. Why doesn't he just save up enough money to put down on something better? He can take the bus or if you want to help him you can offer him rides to and from work if it doesn't interfere . Don't be stupid.

Tuesday, November 28, 2006, 5:25 PM

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The car was not $15000 but because of the crazy interest rate on it. Something like 20% because of bad credit. It came out to this much. You are right, he did not research the car as he should have. He just knew he needed a car and got into a bad situation. Now the car would take $1500 to fix and who knows what would be next to break. I am really trying not to be stupid and I have been giving him rides for the last month. I don't have a problem with that but there are times when we are in two different places. Like I said, he attends school full time after work and his classes get out later than the bus runs. Maybe I am just making excuses or feeling sorry, I don't know. Thank you all for your advice and support though. I will take it all into consideration.

Tuesday, November 28, 2006, 6:26 PM

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if he isn't responsible enough to even research a used car before buying, how can you expect him to be responsible enough to pay you? don't be swayed by your emotions, kiddo. debt runs deeper than puppy-love...and usually lasts a lot longer.

Monday, December 18, 2006, 3:14 PM

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I don't requires different things. No judgments here. If you want to do it, do it. Maybe you'll learn to trust him more.

Monday, December 18, 2006, 4:28 PM

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or maybe you'll be taken advantage of and never trust anyone careful.

Tuesday, December 19, 2006, 10:34 AM

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Tuesday, December 19, 2006, 11:56 AM

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don't confuse being in love with co-dependency. don't mistake his needing you for his loving you. take care of yourself, he obviously can't.

Tuesday, December 19, 2006, 11:59 AM

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He can't take care of her because he has bad credit?

Tuesday, December 19, 2006, 4:31 PM

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he can't take care of himself. if she ruins her credit because she cosigns a loan that she cannot afford to pay off if he defaults, she will find herself in the same boat he is in. thus, he can't take care of himself, don't put yourself in a position that may leave you looking for a cosigner in the future....

Wednesday, December 20, 2006, 9:57 AM

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cosigning for him and then finding someone else YOURSELF could happen, too. and then you'd be stuck having to deal with a previous lover carrying your good name around on his loan. bad idea.

Wednesday, December 20, 2006, 1:41 PM

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