Can a Co-borrower with bad credit hurt my chances of getting a student loan?
I have established, good credit (Fico- 720), but my co-borrowers credit is not that good. When you apply for a loan, would they deny it because the co-borrowers credit is bad?
Would it be better to just apply by myself, and would they accept me alone?
I always thought a co-borrower, even with bad or OK credit always improved your chances of getting approved.
- ♥ Alwayz.....Lv 41 decade agoFavorite Answer
You should be able to get a loan alone. You have outstanding credit by default because there is nothing to say that you dont have good credit. The point of a co signer is because YOU dont have enough credit to get a loan yourself, so the co-signer is there to cover you in case you cant. Its better that your co-signer does too. If you co-signer has bad credit, what makes the loan company think he will cover you if you cant make the payment? I think you should apply by yourself, and let them make the determination if you need one. 9 times out of 10 you should be approved if your debt to income ratio is reasonable and if your currently working. It depends on where your going.
- bruce 888Lv 41 decade ago
When trying to borrow money from any financial institution; "Good Credit" is the key.
People of "Bad Credit" will hardly get anything from those reputable financial company. They may get small loans from those bad "Sharks" and eventually make their credit even worst.
Financial Institution usually ask "Bad Credit" person to bring in additional "Good Credit" partner when applying for any kind of loans; the purpose of this is that if anything went wrong; the partner will be liable and responsible for everything. So this partner takes a lot of risk.
Since you are talking about student loan; I am not sure how old you are and whether you are working or not; anyhow; if you have good credit; a steady income source; you will be better off to apply the loan all by yourself. If you don't have any income source; you may still need to bring in a co-borrower (which is more a guarantor). Of course this co-borrower would need to have "Good Credit".
Bottom line is the lenders need to know that their money/profit will be safe/guaranteed. You can't justify the reason to bring in a "Bad Credit" partner.
It will work if it is the other way around; your "Bad Credit" friend brings you in as co-borrower to guarantee his loan.
So, be careful what you are going into.
- donfletcheryhLv 71 decade ago
A cosignor with bad credit and no significant assets, but a good job can improve your chances of getting a loan. But if the cosignor has no assets, a poor employment record, and bad credit, it may even drag your chances down. I think that lending agents like to avoid trying to explain to their bosses why they think that person's signature adds value.
- anicetLv 43 years ago
definite, yet you may have a severe cost. i've got by no skill common all and sundry to have appropriate credits, yet as long as their earnings can cover all the debt then you definately can get an ok cost. It additionally relies upon on no count in case you and your co signer has labored the comparable occupation for a minimum of two years immediately.
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