Pitfalls Of Co-Signing A Loan - WMC Action News 5 - Memphis, Tennessee

Pitfalls Of Co-Signing A Loan

Here's a good deed that almost always gets punished:  co-signing for a loan.

Sometimes, it has to be done to help a college student establish credit, secure a car, etc.  But Gerri Detweiler, president of Ultimate Credit Solutions in Sarasota, FL. (www.ultimatecredit.com), says be aware of these dangers:

* THEIR credit becomes YOUR credit. The three credit bureaus will list YOU as responsible for the loan. If the borrower misses payments, it can damage your credit.

* THEIR debt becomes YOUR debt. If they default, YOU may be responsible for paying up.

* Co-signing for CREDIT CARDS is a DOUBLE-DANGER. That's because the card-issuer may increase the card's limit. If the borrower is irresponsible and racks up the charges, YOU could be stuck making the extra payments - if you want to keep YOUR credit clean.

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