How will Co-Signing Student Loan Affect My Credit / and Score

[marty56]

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@Anonymous wrote:

Tee, if she NEEDS a co-signer, I'm guessing the tuition per year is pretty steep, correct?

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A good option might be to go to a community college to take the basic courses for at least the first year or so and then transfer to complete the degree ones.  No point in taking freshman math at MIT when you could take it at a local community college.  Unless of course you are going to be a math major.

[Anonymous]

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@marty56 wrote:

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@Anonymous wrote:

Tee, if she NEEDS a co-signer, I'm guessing the tuition per year is pretty steep, correct?

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A good option might be to go to a community college to take the basic courses for at least the first year or so and then transfer to complete the degree ones.  No point in taking freshman math at MIT when you could take it at a local community college.  Unless of course you are going to be a math major.

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You've read my mind.

[atarvuzdar]

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@TeeandDee wrote:

My daughter will need a co-signer because she's 18 years old, will be be fresh out of high school and no way can she be approved for a student loan on her own.  She's just starting out in life...lol!  That's what parents are for!  As long as my children are going to school and being productive members of society, I'm going to do all I can to help them get on their feet in life!  That's what mom's are for!   The only pay back I need is them to go on and live a honest, productive, good life, and do well in college! As long as I'm able...tutiion is on me!  Not them! So no worries of them bailing on something that's on me and Dad in the first place!  After they graduate and if they get that good job, then they can help make the payments, but that's not something I will be relying on when I enter into this.  I think that's the decision parent's need to decide on before entering into something like this. 

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TnD, it occurred to me that if you have credit cards that you could add your son/daughter to them as authorized users to allow them to establish a credit score of their own--so long as you make them AU's on credit cards with low utilization and pristine payment history (which it sounds like you may have!). Generally, you have the option of having new credit cards made for AU's, or not have them made, so you can control the level to which they have access to your account. This may allow your daughter and son to get loans in the future without co-signing for them. Just be aware that, while a credit card with low util and good payment history can increase an AU's score, a credit card with high util and/or even a 30 day late payment can decrease an AU's score (though it's relatively simple to have an AU removed from a card so the card's history doesn't affect them).

This may shield you from any potential negative that comes along with co-signing and so long as you keep up on your credit cards, it will benefit your son/daughter in obtaining credit of their own--not just loans.

Good luck!

[TeeandDee]

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@marty56 wrote:

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@TeeandDee wrote:

After they graduate and if they get that good job, then they can help make the payments, but that's not something I will be relying on when I enter into this.  I think that's the decision parent's need to decide on before entering into something like this. 

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That is a big if these days.  Also you don't know what will happen in the future with your job.  It is great that you want to help your daughter but IMHO you are making a big mistake.  I hope that I am wrong though.

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That's why I also said " I am not relying on that".  We are all here to share our opinions, so no worries! 

[TeeandDee]

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@marty56 wrote:

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@Anonymous wrote:

Tee, if she NEEDS a co-signer, I'm guessing the tuition per year is pretty steep, correct?

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A good option might be to go to a community college to take the basic courses for at least the first year or so and then transfer to complete the degree ones.  No point in taking freshman math at MIT when you could take it at a local community college.  Unless of course you are going to be a math major.

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Actually that is exactly what both my kids are doing.  We paid my son's community college tuition out of our own pockets...no loans, nothing...so that way when he transfers in the Fall to the 4 year he will go in as a Junior and we figured when he graduates, he will have only two years of loans to pay as opposed to 4 years.  Same with my daughter.  She will not be taking out any loans while she's in community college, we willprobably need to take them out when she transfers like my son.  We figured going this route would better financially.  The Community College tuition/books were pretty affordable.  It helps that we just paid off our car so now that money can go into the College fund! LOL!   Especially now that we will have two in college at the same time. 

[TeeandDee]

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@atarvuzdar wrote:

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@TeeandDee wrote:

My daughter will need a co-signer because she's 18 years old, will be be fresh out of high school and no way can she be approved for a student loan on her own.  She's just starting out in life...lol!  That's what parents are for!  As long as my children are going to school and being productive members of society, I'm going to do all I can to help them get on their feet in life!  That's what mom's are for!   The only pay back I need is them to go on and live a honest, productive, good life, and do well in college! As long as I'm able...tutiion is on me!  Not them! So no worries of them bailing on something that's on me and Dad in the first place!  After they graduate and if they get that good job, then they can help make the payments, but that's not something I will be relying on when I enter into this.  I think that's the decision parent's need to decide on before entering into something like this. 

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TnD, it occurred to me that if you have credit cards that you could add your son/daughter to them as authorized users to allow them to establish a credit score of their own--so long as you make them AU's on credit cards with low utilization and pristine payment history (which it sounds like you may have!). Generally, you have the option of having new credit cards made for AU's, or not have them made, so you can control the level to which they have access to your account. This may allow your daughter and son to get loans in the future without co-signing for them. Just be aware that, while a credit card with low util and good payment history can increase an AU's score, a credit card with high util and/or even a 30 day late payment can decrease an AU's score (though it's relatively simple to have an AU removed from a card so the card's history doesn't affect them).

This may shield you from any potential negative that comes along with co-signing and so long as you keep up on your credit cards, it will benefit your son/daughter in obtaining credit of their own--not just loans.

Good luck!

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Good suggestion!! My son may not need that because he has a Student Discover card, but I will add my daughter to give her a good two years of history under her belt before she will need the loans.  Thanks!!!

[Anonymous]

I have told my daughter that I love her way to much to ever co-sign anything for her.

I give her and my grand daughter a free place to live but it is up to my her, along with a little bit of cash for books, to find a way to pay her own way. She generally only takes two classes at a time, but she is debt free and it means a heck of a lot when she is paying to sit in that seat.

Sadly all too often kids default on these loans and or never finish college and then the co-signer is stuck. No one can say they would be ok if the kid dropped out after a few years and yet all the debt remains forever.

I would suggest to any parent that says they are going to pay for the loans anyway, to take out personal loans on your own, rather than student loans.

As others have said, student loans never ever go away, until paid in full, and god only knows how much life can happen to the best laid plans.

All my opinion of course, and I have sure been wrong before.

[TeeandDee]

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@Anonymous wrote:
I have told my daughter that I love her way to much to ever co-sign anything for her.

I give her and my grand daughter a free place to live but it is up to my her, along with a little bit of cash for books, to find a way to pay her own way. She generally only takes two classes at a time, but she is debt free and it means a heck of a lot when she is paying to sit in that seat.

Sadly all too often kids default on these loans and or never finish college and then the co-signer is stuck. No one can say they would be ok if the kid dropped out after a few years and yet all the debt remains forever.

I would suggest to any parent that says they are going to pay for the loans anyway, to take out personal loans on your own, rather than student loans.

As others have said, student loans never ever go away, until paid in full, and god only knows how much life can happen to the best laid plans.

All my opinion of course, and I have sure been wrong before.

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Everyone has to make their own decision and decide what works best for them as a family.  You can't base everything on the horror stories that happen to others.  As I said, my husband and I are taking care of the bills for our kids college. That's what works for us.  My kids aren't dropping out, not sticking us with any bills etc...lol! That's not everyone's story. Some kids want their college education, work hard and finish.  Not all kids drop out and or stick their parents somehow..  Smh...some do, many don't.  Too each their own.   I simply wanted to know How will co-signing for the student loan affect my credit/score.  

[Anonymous]

The thing is Tee, a lot of them did answer your question. Summed up, it could very well affect you negatively years from now.

I know a lot of people delved in deeper, but it's not out of malintent, moreso, out of concern.

[TeeandDee]

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@Anonymous wrote:

The thing is Tee, a lot of them did answer your question. Summed up, it could very well affect you negatively years from now.

I know a lot of people delved in deeper, but it's not out of malintent, moreso, out of concern.

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Well, I just do not see how co-signing and making on time montlhly payments can negatively affect my credit years from now.........  I can see co-signing and relying on someone else to make the payments could negatively affect credit....  but I clearly stated in almost each post that I would be making the payments. So I do not see how co-signing in that situation will harm my credit for years to come.