Last year I bought a car. Since i don’t have the best credit they told me i would get a lower interest rate if my mom was the main signer and i be the co-signer. I’m trying to build my credit back up and if I’m making all my payments on time who’s credit is being positively impacted? Her’s or mine?
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Both – since you are both legally liable for the loan, you both get the credit (good or bad) for how the loan is paid off.
both
if your giving her the money to make payments, then her credit is being affected
if your making payments, then your credit is being affected
now, if she does stop making payments, you will be responsible to make the payments from now on and if you dont, say goodbye to your credit
it will take 7 years to rebuild it…
Yours… she cosigned for your loan, which means she’s responsible if you don’t pay. But one of the purposes of cosigning is so that the borrower – you – can repair your credit by paying on time all of the time. This will enable you to get a future loan without a cosigner.
If both of you signed for the car both it will impact both of your credit scores positively or negative depending on if you make your payments on time or not.
These are the factors credit bureaus use to report your credit to potential lenders:
Payment history (35% of the rating) – make your payments on time on a consistent basis.
Length of credit history (15%) – Have you had credit for 1 year or 5 years.
New credit (10%) – Have you applied for lots of loans/credit cards recently.
Types of credit used (10%) – They want to see difference types of credit, revolving credit(credit cards) and installment credit is for like home, car and student loans.
Debt (30%) – Basically how much total debt you have compared to credit available. So if your maximum credit limit is $10,000 on all your credit cards, don’t have $9,000 used up, it looks bad.
The loan shows on both credit reports and impacts both.
I suspect you really didn’t get a better interest rate by having your mother co-sign. The interest rate is usually based on the lower credit score. Your mother co-signing just guaranteed the loan.
Both.
You should get a copy of your credit report (http://www.annualcreditreport.com) and make sure that it is being reported on your report as well.