|BUILD CREDIT AS A COSGINGER|
|Posted on: Sep. 21, 2017 in Car Loans|
Whether you’re a young college student and just getting started, your credit score could use a boost, or you otherwise need to build up a credit history, cosigning on a loan can be an easy way to help you raise your credit score. Particularly if you’re in the market for a new car, you may find that not having a good score, or any score at all, will make it difficult to purchase the car you need. Your first instinct may be to take the loan out in your name and ask a family member or friend to cosign the loan for you. While that may work, here’s another idea.
When you cosign a loan with someone else as the primary borrower, their credit is utilized by the lender to decide whether to extend the loan in the first place, as well as all applicable terms. People with better credit have more flexibility, more borrowing power, and better interest rates.
However, when you are listed as the primary borrower, you may find you cannot borrow as much as you need, the interest rate is much higher than you’d like or can afford, and you need a higher down payment or shorter loan length, meaning you’ll have to pay more out of pocket either initially, monthly, or both. This can result in you being unable to take the loan, or afford it, even if you are approved.
As if that’s not a good enough reason to become a cosigner on someone else’s loan, here’s another reason. Even as a cosigner, you’ll be building the credit history you need to get approved for such loans in the first place. Just make sure that all payments are made on time and the account is always in good standing. Otherwise, you’ll be building the kind of credit history you don’t want: a bad one!
If you’re ready for a new car but your credit is keeping you from getting approved, CreditYes can help with our bad credit auto loan program! We can match you with a dealership in your area that will be with you every step of the way. Our service is fast and free. Fill out our secure online application and get behind the wheel of your next car today!