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Will You Add? - To Co-sign or Not to Co-sign Loans for Family...That Is the Question
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Co-signing for family members…
I can remember stories about my family members asking our Uncle David to co-sign. I should know, I was one of them.
What I noticed is that after one family member asked Uncle David to co-sign...all the other family members deemed it their birthright to do the same. Whether it was for a car, motorcycle, camera equipment, or business loans...Uncle David was (and still is) there to the rescue. (Does your family have an Uncle David?)
To a lot of my family, Uncle David turned into Uncle David Bank and Trust, Inc. The sad fact is many family members took advantage of his kindness. Some only paid him back after they passed away. Many times he was left high and dry, making the payments f
Take that title seriously. If you want to make a successful business venture online, then you need to do the right way of designing your web site. It is your major investment that would make your business possible. Also, do not ever think that your visitors are gullible. This is the common mistake with web designers.Here are things that you need to consider.1. There are some websites that are programmed to show a pop up ad when you click the back button. Do not program your site this way. Customers will get annoyed and would not return anymore.2. Do not design a site that would push your clients overboard. Though your main concern is to sell, still you need to show emotion by under
Don't do it.
It weakens your position with lenders. Once a lender sees a co-signer on one of your loans—the lender will question your stability and move into “cover their butt" mode. And the way lenders cover their butts, is by forcing you to get a co-signer on your next loan...and the loan after that...and the loan after that.
Bottom line: When you have an existing co-signed loan—the chance of a lender requiring a co-signer on your next loan increases significantly.
There are right ways to recover from bankruptcy (or just rebuild bad credit) properly and quickly. But having a co-signer only delays your recovery and sets you up for complications along the way.
If you are unable to qualify for the credit you need...take it as a sign that it is not meant to be...until you can qualify on your own.
What if you are asked to become a co-signer?
I have a core belief...and it goes something like this, “Lend people money only if you can afford not to get it back and you won't hold a grudge if you don't—but never ever lend people your credit."
If you're thinking about co-signing for someone...
Don't do it.
There is too much at stake.
If the borrower defaults on the loan, two things will happen to your credit reports and FICO credit scores:
1. If the loan goes into default, the lender looks to you to make the payment(s)...so have your checkbook ready.
2. Each time the loan becomes 30 days past due, a late payment will appear on your credit report(s) for up to 7 years...and as a result your credit scores will be lower than they could be.
Additionally, when you co-sign...
1. The payment you co-signed for is calculated in your debt-to-income ratio. So going in debt for someone else could actually prevent you from getting the credit you need when you need it. And it could increase the cost of credit since your scores may be lower.
2. When each lender reviews your credit report(s) to consider the loan, they will post a credit inquiry that will lower your credit scores.
3. Your own credit card interest rates could skyrocket due to the added debt. In what is becoming more common practice, credit card issuers are reviewing your credit reports and looking for how much debt you have with other companies.
4. The added debt could lower your insurance credit scores to the point where it could impact your ability to get or keep homeowner's and auto insurance or cause your premiums to increase.
As you can see, there is very little value in co-signing a loan. But there is a lot of downside risk.
And these days your credit score is about more than just your ability to obtain credit...it's about your insurance rates and almost everything else in your financial life.
Co-signing for family members…
I can remember stories about my family members asking our Uncle David to co-sign. I should know, I was one of them.
What I noticed is that after one family member asked Uncle David to co-sign...all the other family members deemed it their birthright to do the same. Whether it was for a car, motorcycle, camera equipment, or business loans...Uncle David was (and still is) there to the rescue. (Does your family have an Uncle David?)
To a lot of my family, Uncle David turned into Uncle David Bank and Trust, Inc. The sad fact is many family members took advantage of his kindness. Some only paid him back after they passed away. Many times he was left high and dry, making the payments fo
Why submit to a Directory?Every webmaster is looking for ways to improve their website’s visibility, and one great way is by getting listed in the major web directories. This should be a very important part of your marketing strategy online, which many website owners neglect.The only way to grow your online business is if people can actually find you! Some web directories have a free submission option whereas others require some form of payment or reciprocal link in exchange. With the hundreds of various general directories and niche directories you have the choose to submit to – it becomes crucial knowing which directories are worth your time and money.Submitting to directories ca
If you are unable to qualify for the credit you need...take it as a sign that it is not meant to be...until you can qualify on your own.
What if you are asked to become a co-signer?
I have a core belief...and it goes something like this, “Lend people money only if you can afford not to get it back and you won't hold a grudge if you don't—but never ever lend people your credit."
If you're thinking about co-signing for someone...
Don't do it.
There is too much at stake.
If the borrower defaults on the loan, two things will happen to your credit reports and FICO credit scores:
1. If the loan goes into default, the lender looks to you to make the payment(s)...so have your checkbook ready.
2. Each time the loan becomes 30 days past due, a late payment will appear on your credit report(s) for up to 7 years...and as a result your credit scores will be lower than they could be.
Additionally, when you co-sign...
1. The payment you co-signed for is calculated in your debt-to-income ratio. So going in debt for someone else could actually prevent you from getting the credit you need when you need it. And it could increase the cost of credit since your scores may be lower.
2. When each lender reviews your credit report(s) to consider the loan, they will post a credit inquiry that will lower your credit scores.
3. Your own credit card interest rates could skyrocket due to the added debt. In what is becoming more common practice, credit card issuers are reviewing your credit reports and looking for how much debt you have with other companies.
4. The added debt could lower your insurance credit scores to the point where it could impact your ability to get or keep homeowner's and auto insurance or cause your premiums to increase.
As you can see, there is very little value in co-signing a loan. But there is a lot of downside risk.
And these days your credit score is about more than just your ability to obtain credit...it's about your insurance rates and almost everything else in your financial life.
Co-signing for family members…
I can remember stories about my family members asking our Uncle David to co-sign. I should know, I was one of them.
What I noticed is that after one family member asked Uncle David to co-sign...all the other family members deemed it their birthright to do the same. Whether it was for a car, motorcycle, camera equipment, or business loans...Uncle David was (and still is) there to the rescue. (Does your family have an Uncle David?)
To a lot of my family, Uncle David turned into Uncle David Bank and Trust, Inc. The sad fact is many family members took advantage of his kindness. Some only paid him back after they passed away. Many times he was left high and dry, making the payments f
To get a new client, we might be inclined to make concessions no matter what the cost: offer a second or extra long sample session; reduce fees; set session times we don’t want to work. We might leap at any opportunity before looking at the possible return on investment of time. These situations end up being lessons learned, sometimes painful ones.Before you get caught in another good lesson, set up your business with strong boundaries. They create a friendly and ethical structure that allows others to find their place with you. They speak volumes about your professionalism and keep both you and your clients on track.Want only as much for your clients as they want for themselves.If
1. If the loan goes into default, the lender looks to you to make the payment(s)...so have your checkbook ready.
2. Each time the loan becomes 30 days past due, a late payment will appear on your credit report(s) for up to 7 years...and as a result your credit scores will be lower than they could be.
Additionally, when you co-sign...
1. The payment you co-signed for is calculated in your debt-to-income ratio. So going in debt for someone else could actually prevent you from getting the credit you need when you need it. And it could increase the cost of credit since your scores may be lower.
2. When each lender reviews your credit report(s) to consider the loan, they will post a credit inquiry that will lower your credit scores.
3. Your own credit card interest rates could skyrocket due to the added debt. In what is becoming more common practice, credit card issuers are reviewing your credit reports and looking for how much debt you have with other companies.
4. The added debt could lower your insurance credit scores to the point where it could impact your ability to get or keep homeowner's and auto insurance or cause your premiums to increase.
As you can see, there is very little value in co-signing a loan. But there is a lot of downside risk.
And these days your credit score is about more than just your ability to obtain credit...it's about your insurance rates and almost everything else in your financial life.
Co-signing for family members…
I can remember stories about my family members asking our Uncle David to co-sign. I should know, I was one of them.
What I noticed is that after one family member asked Uncle David to co-sign...all the other family members deemed it their birthright to do the same. Whether it was for a car, motorcycle, camera equipment, or business loans...Uncle David was (and still is) there to the rescue. (Does your family have an Uncle David?)
To a lot of my family, Uncle David turned into Uncle David Bank and Trust, Inc. The sad fact is many family members took advantage of his kindness. Some only paid him back after they passed away. Many times he was left high and dry, making the payments f
Making money online doesn't need to be a dull and it doesn't require a huge financial backing, best of all there are options available to everybody. It is the perception of most people that money can only be made on the Internet if you have either a ground breaking idea or sign up to a shady scheme or two. But there are in fact a number of ways to earn honest money, in an easy cost and risk free environment. The opportunities generated by the surge in the popularity of the Internet have created a number of money-making schemes, few of which are as a successful or as popular as affiliate marketing.Affiliate marketing may sound like an intricate and complicated advertising system, but in truth it
3. Your own credit card interest rates could skyrocket due to the added debt. In what is becoming more common practice, credit card issuers are reviewing your credit reports and looking for how much debt you have with other companies.
4. The added debt could lower your insurance credit scores to the point where it could impact your ability to get or keep homeowner's and auto insurance or cause your premiums to increase.
As you can see, there is very little value in co-signing a loan. But there is a lot of downside risk.
And these days your credit score is about more than just your ability to obtain credit...it's about your insurance rates and almost everything else in your financial life.
Co-signing for family members…
I can remember stories about my family members asking our Uncle David to co-sign. I should know, I was one of them.
What I noticed is that after one family member asked Uncle David to co-sign...all the other family members deemed it their birthright to do the same. Whether it was for a car, motorcycle, camera equipment, or business loans...Uncle David was (and still is) there to the rescue. (Does your family have an Uncle David?)
To a lot of my family, Uncle David turned into Uncle David Bank and Trust, Inc. The sad fact is many family members took advantage of his kindness. Some only paid him back after they passed away. Many times he was left high and dry, making the payments f
Having a quality brochure makes a positive impression on a potential customer. It gives the appearance that you’re serious about your business.And it may give you an advantage over competitors who don’t use brochures.Printing technology has made big advancements in the last decade, including high speed, high-resolution color photocopiers and laser printers.This has reduced the need for using printing presses and allows you to print small quantities with less expense. If you’re printing only a few hundred brochures, this is the way to go.If you’re printing in the thousands, you may find it more economical to use a printing press. Your per unit cost can drop significantly.p>
Co-signing for family members…
I can remember stories about my family members asking our Uncle David to co-sign. I should know, I was one of them.
What I noticed is that after one family member asked Uncle David to co-sign...all the other family members deemed it their birthright to do the same. Whether it was for a car, motorcycle, camera equipment, or business loans...Uncle David was (and still is) there to the rescue. (Does your family have an Uncle David?)
To a lot of my family, Uncle David turned into Uncle David Bank and Trust, Inc. The sad fact is many family members took advantage of his kindness. Some only paid him back after they passed away. Many times he was left high and dry, making the payments for the borrower.
It's a tough balance to be kind to others, even family members, and remain financially responsible. But one thing I know, I never...never... never...loan someone my credit by co-signing. It's just too risky.
What about co-signing for your children?
If you can easily afford your insurance rates to double, your credit card limits to be reduced, and your interest rates on your revolving credit to increase substantially, then go ahead and do it.
Not me.
I feel it's better to do other things to help your children establish credit.
When my wife and I have children, our plan is to show our kids how to accomplish their credit goals without a co-signer. Will we help them? Sure we will. But not by co-signing. By the time they need to purchase their first car, their credit scores alone will qualify them.
We plan to teach them about the importance of managing their credit and credit scores so they are able to reach and maintain high credit scores; save for a down payment using money they earn (not borrow); and how to compare and select a lender to work with.
What about having a spouse co-sign on a loan?
Well, that isn't co-signing. That's co-borrowing...a different animal altogether. Co-borrowing is common practice among married people on a loan for a car or mortgage. And there is nothing wrong with co-borrowing. The goal, however, would be not to have everything held together. You need to build individual and joint credit so you can weather a storm (i.e., death, serious illness, etc.) on your own if need be.
I only recommend co-borrowing with a responsible spouse. And if you're not married I would even go so far as to suggest reviewing your partner's FICO credit scores! (Should we call this a FICO Pre-Nup?) Consider me paranoid. A person's credit history tends to leave clues. If the clues unearth a trail of bad credit...don't be naive.
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