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Posted in Auto Loans
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Question By
olgrey

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How does a co-buyer with bad credit affect loan if primary has good credit?
Daughter needs car really bad but bad decisions in past gave her bad credit in the mid 500's if I go as primary and add her as a co-buyer will it help her repair credit and will I still get the prime rates of a 785 credit score?

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If you are not prepared to completely take over the loan and pay it off in the event your daughter is not able to, then I would strongly recommend against co-signing. Families and relationships have been destroyed by this. She should save up some cash and buy a reliable, economical car (e.g. Hyundai or KIA) while building her credit separately. Don't play the "mommy and daddy will bail you out" game. This happened to my younger sister when she messed up her credit in college. Although it strained her relationship with the family for about a year because my dad would not co-sign a Lexus for her (lol a freakin Lexus!), she came around and things are better now. Yea, it sucked for her driving around that 1994 Honda Civic (which never required any major repairs, mind you), but she pulled out debt free and with a stronger credit profile. Life lesson learned for her.

Reply by
barney601

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depending on the situation. No one know your daughter better than yourself. If you feel she is reponsible. Why not.  I helped two of my daughters with cars. I carried the car insurance for them. But they did the rest with no problem paid on time until car loan was paid. 

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If her scores are in the 500's she can get a loan on her own.   The interest will be high, but she can get a loan. I agree with mindjazz.  Let her figure this out on her own.  The struggle overcome her past mistakes will make her far less likely to screw up again.  I know you want to help your kid but you'd be doing her more good by letting her figure this out on her own.  Sorry for getting away from credit talk.  I know it's none of my business.  I just work with a bunch of young folks who aren't worth a **** because mommy and daddy have always bailed them out.  If she had good credit and you were just helping her to get a lower rate that would be a different story.

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I guess no one wants to answer your original question

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Whoa. Do you really want to be responsible for this loan? If she doesn't make payments, you'll be on the hook for them. Can you afford the payments if she doesn't make them? If your name is on the vehicle title, and is involved in an accident you can be sued. If you're on the loan but not the title, then you can't take the car if she doesn't make the payments.  Who's going to pay the insurance?  I can't urge you strongly enough to stay out of this. She's made the bad decisions and she needs to fix her own credit. I've had enough kids to know and this is a constant scenario on Judge Judy. Butt out.

Reply by
olgrey

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Enter Your ReplyThank you for the concern. If I did not think she was making the turn around I would not be offering to help. She  wants to do it if she can with out me. But with the low score it may make it impossible to hit her goals. Her current car would cost more to repair than the KBB value and she needs something reliable enough to make a round trip os 60 mile a day and room enough for her and the kids. She already has $4000 budget for down and $1500 for her insurance hoping to get at least $500 for the old junker in trade and she can possible do another $1000 down if necessary all from her own money no kick in from me. So yeah I would like to help her if I can but she doesn’t want me financing for her because she wants the payments to help repair her credit.

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if she continues to pay on time she might be able to refinance the vehicle after a while then itll just be in her name with you off of it. i know cuz ive done it before i was primary and my dad cosigned i just didnt have enough credit then like after a year i refinanced and got the loan in just my name.

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