Help?

[Anonymous]

Ok guys this might be a doozy. Maybe nobody can help but figured id ask. 

Ok so my boss owns a tow company. Just bought a house, owes payments on three trucks and two 4 wheelers . his score is in 600's. he also is partnered with my dad (score in 700's) 50/50 on a body shop that's been open 2 years. He (my boss) applied for a $50k loan for a piece of towing euipment. Based on his DTI and low income on paper/bank statements they denied him. He swears up and down that they said he will be approved if he can have my dad cosign and use half of the income from the body shop for proof of income. My dad is very weary of this. First of all he does not want a hard inquiry. My boss says "they said it will be soft inquiry". He says "They" also say it will not report on my dad's personal report period. 

My question/s is: if they are only going to "use" half of the income for POI why do they need to run my dads credit? He does not want to be a cosigner per say, but is willing to help any way he can without it damaging his report. He has worked hard to build it for years and wants to keep it that way. Now my boss isnt the type to do him wrong ..we are all family. BUT my dad also wants to get a house and truck in the coming years. And does not want his report to be blemishes with debt or unnecessary inquiries, etc. Or even for the body shops credit as well in case he ever needs a business loan. 

Can anyone weigh in as to how true my boss or the loan agency is being? If its just a soft inquiry then why even bother using my dads report? If only using half the income why need my dads report? 

[Anonymous]

Cosigning is cosigning and it means he'd be just as responsible for the debt as the primary.  The account would show on both CRs.  If the account goes late for any reason, both individuals are equally impacted.  After being burned 3 times in my life from cosigned accounts, it's something I would never do again and something I highly recommend everyone steer clear of, regardless of who it is.

[Pikaboo-icu]

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@Anonymous wrote:

Cosigning is cosigning and it means he'd be just as responsible for the debt as the primary.  The account would show on both CRs.  If the account goes late for any reason, both individuals are equally impacted.  After being burned 3 times in my life from cosigned accounts, it's something I would never do again and something I highly recommend everyone steer clear of, regardless of who it is.

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Seriously BBS is exactly right.

I would not cosign for anyone unless I was prepared to make the payments if they default.

If your boss stops paying, your dad is on the hook for the entire loan! 

Somebody is NOT being honest.. They do NOT need your dad's credit or income unless it's being used for the loan. 

Perhaps there is a reason the lending institutions wont finance your boss... Just sayin'.

[Anonymous]

Thanks guys .Have any of you ever heard of a soft inquiry on something like this? Or it not being reported to the CB's? Also is there any such thing as someones report being run for something like this OTHER than being a cosigner? I have never heard of such a thing but am not experienced in this field amd was trying to be optimistic and wondered if there WAS such a thing. Yes though. Clearly they wont sign him alone because of his score and DTI which is considerably high considering all the debt. Even if you guys dont have all the answers for me I appreciate the time and help/opinions you have given and plan to pass the info along to my dad. We work hard for our money/good credit. Not to say that he would be done wrong in this deal but I think the risks outweigh the benefits. My boss never pays more than minimum payments or pays something off sooner than expected. So really were talking about 3-5 years before my dad was to see any benefit of having a loan paid almost off/off. I don't think the risks(many) are worth the reward(one) .Thanks again. 

[Anonymous]

@BBS ..i posted a reply above. Thanks again too. 

[Anonymous]

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@Anonymous wrote:

Thanks guys .Have any of you ever heard of a soft inquiry on something like this? Or it not being reported to the CB's? Also is there any such thing as someones report being run for something like this OTHER than being a cosigner? I have never heard of such a thing but am not experienced in this field amd was trying to be optimistic and wondered if there WAS such a thing. Yes though. Clearly they wont sign him alone because of his score and DTI which is considerably high considering all the debt. Even if you guys dont have all the answers for me I appreciate the time and help/opinions you have given and plan to pass the info along to my dad. We work hard for our money/good credit. Not to say that he would be done wrong in this deal but I think the risks outweigh the benefits. My boss never pays more than minimum payments or pays something off sooner than expected. So really were talking about 3-5 years before my dad was to see any benefit of having a loan paid almost off/off. I don't think the risks(many) are worth the reward(one) .Thanks again. 

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The only soft inquiries I have heard of are from American Express for existing cardmembers (technically PenFed for their pre-approved credit products). Virtually all other lenders will want to HP a bureau to ensure that their money is lent to those that can repay and are not showing signs of credit issues. 

Based on what you have said, the finance company/bank is looking for Personal Guarantee from your boss. And now your boss wants your old man to co-sign, also as a Personal Guarantee. 

It looks like it might be time for your boss to have established business credit (EIN, no personal guarantee) for things like this. That way the business is on the hook for any monies loaned. 

If it were my old man, I would strongly advise him not to do it. 

[Pikaboo-icu]

Roy, It sounds shady to me..

The only thing I could suggest is possibly have your dad call the loan officer and request IN WRITING that his credit will not be HP and ask the loan officer to explain why your dad's credit is even being SP'd

Never mind, even that doesn't seem like enough to protect your father. It would require an attorney and lawsuit to rectify if your dad gets well screwed in this.

Do you even know the loan company? Because some are more reputable than others..

Honestly, I would pay a couple hundred to an attorney before I agreed to ANY of that.. 

[ToughFistFight]

Sounds like a bad idea. 

[Anonymous]

Roy21 from a business or personal sense ... cosigning is a bad idea unless it is for you! Too much risk so be very careful ... !!!

[Anonymous]

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@Anonymous wrote:

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The only soft inquiries I have heard of are from American Express for existing cardmembers (technically PenFed for their pre-approved credit products). Virtually all other lenders will want to HP a bureau to ensure that their money is lent to those that can repay and are not showing signs of credit issues. 

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HPs are for those seeking new credit or in some cases additional credit.  A HP vs a SP has no bearing on what the lender sees, thus meaning it doesn't give them any better look as to whether their money can be repaid or if someone has credit issues.  If the OPs father is co-signing, the account is equally his responsibilty.  The credit therefore is considered equally his and it's new credit, thus would be a reason for a HP.