Being a Co-Signor on a loan

How does co-signing a loan affect credit? If you are in the situation, and are asked to be a co-signor on loan, it will be useful to know that the loan will report to each signors bureau with the same strength. Under the loan that is reported to the bureau it will show a “J” versus showing an “I”. “J” meaning JOINT LOAN and “I” meaning INDIVIDUAL. This will be listed as the first character in the loan number assigned to the loan from the lender. It is a code that gets reported to the lender and will be used for credit bureau reference. It is important to know that upon any late payments, or defaults¬†with this loan it will get reported to both applicants bureaus with the same strength. In my opinionn, it would be advised to have a method or “plan B” in place, prior to proceeding as a co-signor on a loan. This being said, co-signing for an individual on a loan is a great way for the main applicant to establish credit, while still being able to take advantage of the cheaper interest rate. This is a general overview of being a co-signor on an individual loan and how it affects credit.¬† Being a co-signor for a business loan is a complete different topic.

Are you pondering the idea of being a co-signor for an individual, and have questions?

Just My 2 Cents