Questions regarding a co-signer

[Anonymous]

Hi All!

New to the forum and I'm in need of some advice.  I desperately need a newer car and my wonderful brother-in-law agreed to co-sign on a loan (I don't think I would ever get approved on my own or if I did my APR would be sky high).  My scores are roughly in the mind 570's for TU and EQ.  For EX its in the 630's. 

This might be a silly question, so please bear with me since I've never financed a car and I have no idea what to expect. 

How does co-signing work?  Would our scores be combined and the average taken from that?  How would it impact the decision on whether or not to extend me credit?

Edited to add:  I have a steady income, been working at the same job for 7 years.  And to be honest, I've NEVER been without a job since I was 16 and I'm now 35.  That's why my bro in law knows I'm good for it and he's willing to co-sign for me.

[creditbroke]

Whats your credit report have in it? Your so close to buying one on your own a simple secured card reporting maybe enough to bump you to 6's with all the CRA's.

[Anonymous]

Thanks for your reply!

I have 3 CC's that are all between 50%-75%  of reaching their max.  I also have 4 collection accounts, (1 is $188, 2nd is for $300, 3rd $125, 4th $70) which I have every intention of clearing up, but I wouldn't be able to have them all paid before I'm ready to buy.  However, I'm planning on paying down my CC's to have them with no more then 25% of the credit limit used before the end of this month.  I desperately need a more reliable car for work, the one I have now just starts when its in the mood lol

Would a co-signer be my best bet at getting a better APR since I have a few strikes against me? 

[marty56]

When someone cosigns a loan for you, the lenders is using the cosigner's credit to approve the loan.  It is just like if they applied for the loan on their own.  The lender will come after the cosigner if you don't pay and the cosigner will have the autoloan on their credit report..

It goes without saying that you should doubly make sure you pay each month since any late payment will be reflected on the cosginer's credit report

[daisyduke]

Hi Dee722,

Welcome to the forums. where did you get your scores?

In a nutshell, I believe the finance company combines the scores so if your BIL has a good scores combined with your score, you might get a much better rate than on your own.  This could save you thousands....

But you have to pay on time so that you don't have his credit report hit with lates, etc. because that stuff will be reported as a co signer on his credit report as well.  He will have the tradeline of the auto loan showing on his credit report as well, so if he is willing to do this, I'd just follow through with on time payments and never have a late payment on the auto loan. You wouldn't want to jeapordize his good faith in cosigning.

My sister co signed a car loan for me when my credit was in the toilet. I think at that time I was at 512, I never let her down. I think I was more conscientious of her name than my own. She did a good thing for me and I wouldn't want to destroy her credit or have any problem.

Good luck to you and I hope everything works out!

[Anonymous]

Thanks marty56 and daisyduke for ur replies :-)

The more I think about a co-signer the more I want to do it on my own.  Although, I do have steady employment making 60K the uncertainty of what could happen down the road has me thinking ALOT.  Not to mention reading all the negative feedback about co-signing on this forum. 

daisyduke, I got my scores from Truecredit.com.  I know they're not official FICO scores, but it gives me an idea of where I am.  I checked on them today and TU is 580, EQ 596 and EX 636. 

I just paid off two of my most recent collection accounts and I also paid down all of my cards.  I'm praying my reduced balances don't take FOREVER to update on my CR's and when they finally do show, it helps my scores.