Does applying for a car loan with a co-signer that has poor credit affect approval?
As the title states. When I was young, I was dumb, and of course I got burned by credit cards.
The situation as it stands, is that I'm trying to buy a very nice car. My current financial circumstances dictate that I'll be more than capable of handling the monthly payments - but my credit score doesn't say as such. I've recently paid off all my outstanding debt, and I'm in the process of repairing the payment history.
What I am thinking of then, is having my parents (with perfect credit) do the loan - and having me as the secondary. It would pretty much come down to me using their credit to get approval, but I'd be taking over the payments from there. Ideas? Thoughts? Please support with facts, not "wisdom".
2016-04-05T02:13:09Z
Please stop telling me to "buy a car with cash". I've already discarded that consideration. I believe I asked about applying for a car loan, not alternative ideas - and that I'd like answers to such based on facts, not "wisdom".
Anonymous2016-04-05T01:22:01Z
Well first you can not repair your payment history. If you are using one of those so called credit repair services, you are being ripped off, they can not repair anything that is legit. Their advertisements (by paid actors) sound good but they can do nothing for you except take your money every month. If you have been late on payments, it stays on your record for 7 years if the information is accurate
Depending on how bad your credit is (you didn't say) good chance even with a co-signer you would not be approved because the lender knows you are the one that will be making the payments, and why your parents would want to be stuck with a car payment I have no idea. You are late with one payment it effects their credit score or they are spending money they do not have to to make sure you are not late.
Buy a car you can afford (cash). If your parents want to help, have them loan you the money directly and you pay them. And why does it have to be a very nice car? Why can't you buy a good car to get you back and forth to work? I would be more worried just to get transportation than "A very nice car" to show off in.
And there is no secondary loan. either your parents are co-signers or they are not. There is no they take out the loan and you just get yourself added
If your parents are willing and able to take out the loan for you, they can of course do that. Both the loan and the car would be in their names, but you could make the payments, pay for the insurance and other expenses. With bad credit, you couldn't be a co-signer. This plan would get you the car, but wouldn't do anything for your credit.
Of course it affects approval. If the lender finds the co-signer to be unacceptable, there won't be any loan.
There are no "primaries" and "secondaries" on loans. You're either a borrower/coborrower or you're not. A co-signer is a totally different thing from a co-borrower. If your parents buy the car, you cannot "take over" the loan at your or their option. The lender won't allow that.
Knowing YOUR credit history, a co-signer would be crazy to co-sign anything in the first place because you don't pay, co-signer is responsable......bad deal. Plus: he also has poor credit so it is zero situation all around. I certainly would not give you - or your friend a loan.
if you want to build your credit see if you can get the loan in your name with your parent's co-signing, And since you want facts, you didn't get burned by credit cards, you misused your credit. It is good that you have paid off your debts, but you cant change the payment history.