I’ve recently applied for some auto loans, and I keep getting the same answer. Your income and payment history look good, but your length of credit is too short. And they keep pushing for me to get a cosigner. Well, I have no family in state with me, and frankly none of them have as good as income as I do. My boyfriend offered to cosign for me, he has excellent credit and income. But I feel as though that is a burden on him and don’t want anything to affect his credit score, being that it is 801. How much will a small loan, say $3,000, affect his score, provided of course all the payments on time? This is not a trust issue, this is more of a does this make financial sense issue.
If the payments are all on time it will have a negligible effect on his credit score. A new account would most likely appear on his report but if his current credit score is 800+ it will not have a negative effect enough to matter. If there is any drop it will still leave him way over the threshold of what lenders look at as upper tier.
On another note have you inquired of any lenders whether a larger down payment may offset the need for a co-signer? Either you could come up with the cash or perhaps your BF would like to just provide the cash for a down if necessary. You could work out the details of a loan repayment schedule outside of the car loan and the credit bureaus.
Starting Score: 500'sWell, I put 1500 down and thankfully qualified for a "1st time buyer" program through a credit union! The interest rate is crappy(7.3% essh) but whatever, if I pay it off early, like I plan to do on down the road (after my credit has a chance to build) it won't matter. So he didn't have to cosign at all! I'm so happy to finally have some depth to my credit report!