co-singed loan -effect on credit?

October 2nd, 2008 by Questions

My husband and I are in need of a new car. We are looking for something cheap. We have been pre-approved to finance at an attrocious interest rate (which we expected) and were told leasing is not an option. We could lease for much cheaper than we could finance but can`t get approved to lease because of our bankruptcy (which was discharged over a year ago).
My parents have agreed to cosign a lease or finance agreement for us to get us a better interest rate. I know that a car loan/lease will help improve our credit but I wondered if there is any negative impact to having a co-signed loan? Does it show on your credit report as being co-signed? Will a co-signed loan help our credit score improve as much as it would if we got the loan on our own?

Posted from: Ontario

Questions

One Response to “co-singed loan -effect on credit?”



October 03, 2008 at 5:53 am, A licensed trustee said:

I don’t believe there is any provision in the credit reporting bureaus to show that a debt is co-signed. From their persepctive, you either owe the money or you don’t (co-signers owe the same amount as the borrowers so it doesn’t need to be reported differently).

As you make your required payments the lease/loan will affect (improve) your credit rating. Just becareful not to lease more car than you can afford – if you have payment problems the co-signer will be held responsible for your debt.

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