@Anonymous wrote:
Hi everyone,
I currently have a car loan on my credit profile. My father is a co-signer on the loan along with me. Now, I took the loan out two years ago, but I recently moved from the suburbs to the city. I no longer need a car, and my father actually took the car and assumed the payments (this was his idea because he wanted a second car). My question is this: will removing the debt load from my report impact my score one way or another? Is the debt hurting my score or are the timely monthly payments helping my score? There's about $9,500 and 36 months left to go on the loan.
Thanks!
hello and welcome to the board! well, your current loan is helping and hurting you. for one, make sure he will make all of his payments because you're still on the car so if he defaults, it looks horrible on you.
two, the on time monthly payments will be reported for you every month so that shows consistency so that helps keeps your score and report stronger.
the negative - well, if you dont need to apply for credit then don't worry too much, but if you wanna get another car in a few months then itll show that you have your monthly obligation (whatever the monthly payment is on the car you and your dad are on) and itll be harder to get approved with a short credit history.
also, your debt to income ratio will always be affected, but its such a small amount i wouldn't worry too much.
IF you can get him to finance it in just his name then thatll really help your score too because a paid off auto always looks good. BUT, if he does do that, it would be good if you reploaced your existing loan with a new one so your monthly payments for lending remain consistent.
just my .02
YMMV
