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Quick Tip: Co-signed Contracts September 4, 2011

Posted by CredZoo - Tame Your Credit in New Credit Information, Tips For Good Credit.
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When you agree to be a cosigner for someone else’s debt, you are guaranteeing to pay the debt if the primary borrower fails to pay the debt.  Think carefully whenever you cosign a contract because you may have to pay the full amount of the debt if the primary borrower does not pay even if they go through bankruptcy.  Additional late fees, collection costs, repossession fees are also guaranteed by you when you cosign.

   Example: You cosign a car loan with your child because they do not have the credit score needed to get the loan. A year down the road, the car is repossessed and there is a collection company calling you now for the remaining balance of the car. This is the first you will probably hear about the situation. You now have a repossession and a collection reporting and your scores have dropped 100 points. As a cosigner you are responsible for all balances and charges pertaining to that car loan.

Stay tuned for more great credit tips!

Brought to you by, our friend, Joe Farro, certified mortgage planner at Premier Capital Mortgage