Co-signer and current FICO scores

[WendyT]

I co-signed on an auto loan 7 months ago. At the time my scores were 704, 721 & 795 (big gap, I know); due to my friends horrible payment history my scores have gone down (EX went from 721 to 641 last month). Is there ANY way I can rectify this??

Thanks,

Wendy

[Anonymous]

Unfortunately, as long as your friend is in control of payments, your credit is tied to his payments for good or bad.  Possibly the best way to correct future issues is to require him to pay you 1 month in advance, and you pay the bill.

As for the past baddies, you could contact the finance company, explain you co-signed and were not aware of the problems the friend was having, that you are taking over payments (make sure they are caught up) and ask for a GW (can write a letter to this effect too).

Unfortunately, you are financially responsible.  If they refuse, you cannot dispute because it is legitimate.  This is why is never a good idea to co-sign, even for a friend.  Otherwise, you may lose a friend and your good credit.

Co-signing makes you the "guardian" of the loan, his/her supervisor and chaperone. 

Message Edited by txjohn on 04-13-2009 04:15 PM

[Anonymous]

What txjohn said is absolutely right.

It's your responsibility to monitor how your friend pay this loan and also trusting him with his current and past history and capability of making payments, that's why you co-signed him.

[Anonymous]

See about setting up an automatic payment through the company's website where both parties can log in and check the status of the loaon at any time.  If the friend defaults more, step in to make payments.  Personally, I would make a payment on it myself to get it ahead without telling that person.  Then, I would have a serious talk with them about what it is doing to your credit and what steps you may need to do to protect yourself.

[WendyT]

Thank you for your help. I do know that I messed up big time by co-signing. Dumbest thing I've ever done. And although I hate the fact that my scores have dropped so much so fast - my focus is how to get them up quicker than the time it took originally. This loan is the only 'flag' on any of the reporting agencies because I've been very dilligent about walking a straight line to get my scores where they were.

Could there be anything I can do as such as contacting the agencies??

I appreciate your help!

[Anonymous]

The milk of human kindness soon sours in co-signer deals.  Unless you are married to the person DON'T do it unless you understand and plan to pay the loan, part or in full, yourself.

As I posted, you need to take lead on the loan and make the friend pay you a month in advance and you post the payment.  Then contact the lender and explain your circumstances and plead ignorance, but that you are now handling it and ask for a GW (can write a letter to this effect also).  You may get some grace, but may not.  However, you cannot make the situation worse by asking.

You should also have a sit down, heart to heart with this friend.  Explain the damage they are doing.  Explore options to get this person refinanced on their own.  Worst case, look into selling the car, paying the note and then let the friend be responsible for themselves.... 

Message Edited by txjohn on 04-14-2009 08:19 AM