What does a cosigner credit score need to be

Several reasons exist as to why the rental property owner might ask you for a co-signer. It might be because you have poor credit, but it can also be due to having no credit or too little credit. If you have not lived on your own before, or are very new to the area without an income yet, he might want a co-signer to ensure your rent will be covered. Regardless of the reason, you have been asked to find one. Who do you ask? The most important qualification for a cosigner is his credit rating.

Tip

When asked to find a co-signer for a lease, find a relative or friend whose credit score is better than yours, preferably in the 700-range in order to convince the landlord to lease to you.

Defining a Co-signer

In choosing who to ask, you need to know what you are asking the co-signer to do. A co-signer is the person who will be responsible for your rent payment should you fail to make it on time. It means that this person is agreeing to receive notification from the landlord if you miss your rent payment, and that the co-signer will pay it for you. Whether you pay it back to the co-signer later will be between you and the co-signer; however, in most cases, cosigners are not too happy to get that call and write that check.

If your co-signer does not pay your rent when notified that you have defaulted, this can not only appear on your credit report, but it can also be placed as a negative on your co-signer's credit. The co-signer essentially puts his credit up as collateral, guaranteeing the landlord that the rent will be paid every month while you live there.

Due to the fact that co-signing puts the person on the hook for your rent and can potentially damage his credit, it is not something most people agree to do for casual friends or relatives who have demonstrated irresponsibility in the past.

Reviewing Co-signer Credit Requirements

Due to the reasons you were asked to find a co-signer in the first place, your co-signer has to have decent credit and, in most cases, is expected to have above-average credit. The landlord will conduct a credit check on the co-signer, just like he did on you. If your potential co-signer does not have acceptable credit, the landlord makes the decision on how to proceed with your application. Choose your co-signer carefully.

A way to find out if the person you are asking will pass muster is to tell that person you need a co-signer due to having credit issues or not enough credit and ask if they would be willing to co-sign for you. Typically, if the person you ask also has credit issues, he will say so, or at least say he does not want to co-sign (rather than tell you his credit is tanked.)

Look for a High Credit Score

A safe bet for finding a co-signer to pass your landlord's inspection is for the co-signer to have a credit score of 700 or better. It can be awkward to ask the co-signer what his credit score is, especially when you are asking him to do a huge favor for you by signing in the first place.

Some landlords will accept a co-signer with a score of less than 700. You should ask what credit score he would like the co-signer to have so you make sure to bring him what he wants.

Whether someone co-signs or not is an individual choice. Don't take offense if people decline. It could be due to them having their own credit issues, or they could have been burned in the past. Their debt ratio may already be too high, or they won't be able to cover your rent if you default and they don't want to take that risk.

If you are unsuccessful in finding a co-signer, you can also try a professional co-signing company. They charge fees for the service and usually only co-sign for those whose income is not high enough to pass the landlord's requirements. In most cases, they will not assist someone who actually has poor credit.

If lenders are denying you a car loan based on your credit score, finding a cosigner could be a solution. However, cosigners are typically required to have good credit. Here’s what to look for in a cosigner.

Requirements of a Cosigner

When you’re scouting for a cosigner to increase your auto loan approval odds, look for someone with disposable income that can cover your payments if required, and someone with a long-standing, healthy credit history and a credit score above 660 (considered good credit).

Lenders vary in their exact cosigner requirements, but cosigners must typically be able to meet all the same or similar lending requirements that you are. The purpose of having one is so that you can “borrow” their good credit score to help you meet auto loan requirements. Cosigners must also promise to make the car payments if you can’t. Additionally, in a lender's eyes, cosigners with good credit history may have a higher chance of helping you.

If you bring a cosigner that has a lower credit score than yours and no income, they’re not very likely to assist you in getting a car loan. A cosigner with poor credit may also not be of much help in qualifying for a low interest rate on a car loan either, since credit scores are usually the main factor in what interest rate tiers you’re placed in.

Can’t Find a Cosigner?

Not every bad credit borrower has someone they can ask to be a cosigner. However, keep in mind that a cosigner doesn’t need to be a family member. They can be a friend, co-worker, acquaintance, roommate – your relationship with them doesn’t matter. Auto lenders want to know if they have good credit and would be able to assist you with repaying the loan if you can’t.

The only person that can’t cosign a car loan with you is a spouse, since they would become a co-borrower instead.

Remember that when asking someone to be a cosigner, they’re going to be responsible for your auto loan if you’re unable to keep up. They’re directly tied to the activity on the loan, so if you miss a payment, their credit score is going to be impacted, too. This also means that when you maintain a good payment history on the cosigned car loan, you and the cosigner both benefit from the positive, timely car payments!

Need to Go it Alone?

If a cosigner is out of the question for your situation, and your credit score is making it tough to get the vehicle you need, then exploring subprime auto loans could be your next step.

Subprime lenders are signed up with special finance dealerships, and they’re no strangers to credit challenges. If you’re in need of vehicle financing and want to get connected to a dealer that’s signed up with subprime lenders, then look no further than Auto Credit Express. Once you complete our free auto loan request form, we’ll look for a special finance dealership in your local area.