Things To Remember When Looking For A Co-Signer

Before scouting for potential co-signers for your bad credit car loan application, we advise you to think about the following things, first:

  • cosignerThere’s just one reason why consumers look for co-signers – that is, to qualify for affordable credit deals, despite their less than perfect credit standing. So, before hopping on a quest to find a co-signer, you should determine first what your actual score is. Pull your credit files from the three major credit bureaus so that you’ll know what your current rating is. And see to it that your credit report is free from negative items, which could inflict further damage to your credit history. By doing so, you can gauge if you can qualify for a car loan that carries a reasonable rate of interest, on your own; or you will have to rely on a creditworthy individual, who’s willing to back up your application for a suitable credit account.
  • There are certain criteria that your target co-signer should meet, before he can assist you in applying for an affordable loan. First of all, he should have good- to excellent credit standing. This way, his score can pull your credit rating up and thus improve your overall chances of being granted a car loan that carries a good-enough interest rate, a sufficient loanable amount, and flexible payment terms and conditions.

Second, he should understand what will be expected of him as a co-signer. For instance, he should be ready to submit payments on your behalf, especially if you cannot gather sufficient cash to settle your dues for the month. Moreover, he should be aware of the fact that your credit and payment activities can have a huge impact on his credit history. Finally, if the two of you cannot submit repayments to your creditor then, the firm can take legal actions against you. And if this happens, your credit profiles will surely suffer.

So, as early as now, you should explain these things to your prospective co-signer. Then, let him decide whether or not he’ll push through with his plans to back up your credit application. In case he decides to turn down your request then, you may have to approach your other friends or relatives, who may also be willing to co-sign your application for a bad credit car loan.

  • It is your responsibility to protect your co-signer from liability. You should do your utmost to help your co-signer maintain his excellent credit reputation. To do this, you should see to it that you will submit prudent and complete payments to your lender, all the time. And be sure to abide by the terms and conditions of your car loan, especially in terms of pre-payment, refinancing, etc.

Suppose you discover that you cannot pay your dues for the month. How can you shield your co-signer from financial liability? Well, in this situation, it would be best to contact first your creditor and request for an extension on your due date. Explain your situation to your creditor and be ready to negotiate for a lower monthly installment or for a more flexible payment arrangement. By doing so, you can keep up with your financial obligations, without inflicting damage to the credit history of your co-signer.

View Resources for Bad Credit Car Loans

Elizabeth Roberts

Elizabeth Roberts

Liz Roberts and her team are continuously providing information to people who are ready to repair their credit and improve their credit score. Also NewHorizon.org team strives to empower the homebased and small business owners by bringing information that can help them to manage and grow their businesses. Let our 24+ years of business finance experience help you to get the financing you need! CONTACT US if need financing for your business.

2 Comments
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NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

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