Co-signing credit card question?

Question

I cosigned a best buy credit card for a relative and he got $3000. credit limit. I am a little scared now since my credit score is roughly 735 and I was hoping to cross 750 to make it excellent. I am worried that every time he makes a purchase (even $700), it will bring my credit score down. I know he makes payments on time and try to get rid of payments as soon as possible but I was the scores to rise and not fall. Do you think it will really effect my credit scores in a negative way if he uses the card more often but makes on time payments?

Also the credit card company told me that me being the co-signer can cancel the account anytime. Now I heard that cancelling credit cards hurts the credit score if it's your credit card. But in this case I am the co-signer, so if I decide the cancel the account then will it affect my credit score as well? The customer agent said that it won't but, huh I know sometimes there are dummies sitting on the other side as well.

bdancer222 · Accepted Answer

It was a very bad idea to co-sign that card.  You should have asked all  these questions BEFORE you signed.  The account should show up on both credit reports and will affect your credit for good or bad, depending on how the relative handles the account.

Carrying large balances can hurt you.  Paying late can hurt you.  The account will be included in your debt to income ratio and could hurt you if you apply for a car or home loan.  Opening the account dinged your score and lowered your average age of accounts.  If the relative defaults, you are liable to pay.  These are just some of the potential problems.

In fact, there are no positive aspects for you.  People need co-signers because they have already trashed their own credit.  They won't hesitate to trash yours as well.  

I strongly suggest you make sure that relative pays that account in full and then close it.  Do it by letter and request confirmation that the account is closed and 0 balance.  Keep that confirmation forever.  Dont' be surprised if you have problems closing the account without the relatives permission.  You usually need both to close a joint account.

Anonymous · Answer

A credit score is based on a 12 month activity and goes up 5 to 10% per month providing you are paying on time. As long as the card holder makes the payment on time, it will boost your score. If you are already at 735, you'll have an excellent score (750/840) in another 90 days. You can cancel the card but you will still be responsible for the payments. Perhaps if you offered the card holder money to close the account, you can sleep a little at night. If he agrees to do it, go into Best Buy together  and make sure the account is closed.  .

Go with the flow · Answer

Immediately, get your name off that card.
Do you know you are equally responsible for the debt?
And, if they carry a balance this lowers credit scores.
For best credit, cards should be paid in full each month.  

What were you thinking by co-signing?  What on earth were you thinking?
Forget about hurting the score.  That is so minor compared to carrying balances.

Calvin C · Answer

his usage will have little affect on your score unless he fails to pay however that 3K is available credit to you so when loan shopping they can hold it against you to deny loans charge higher interest rates what ever they desire.  If you cancel he gets canceled as well

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Co-signing credit card question?

4 Answers