Experts Warn Against Sharing Good Credit Scores with the Unworthy
Posted on September 12, 2011
There are many consumers who have less-than-perfect credit scores these days thanks to the many economic problems facing Americans. However, experts are appealing to those that have been able to maintain their good credit profile not to share their good financial status with others in need.
Since credit scores are used by nearly every industry today, financial experts warn consumers about taking on financial obligations for others because you have a better credit score. This includes becoming a co-signor on a mortgage, car loan, or even a rental application. When you act as a co-signor on someone else’s financial transactions, you are putting yourself in the position of not only having to repay the obligation but also ruining your own good credit standing should the other person default.
More often people who have good credit are asked by loved ones to help them financially. While it is certainly up to you to decide to lend someone cash, it is never wise to lend them your credit status. Those who have maintained low credit scores likely defaulted on one or more accounts and have not done the work to improve their existing credit score. While they may promise to maintain the new account, if they slip up your credit score will go down as will theirs.
Credit scores are a vital part of a personal finance background. Personal finance experts advice consumers to deny requests for acting as a cosigner on any financial obligation unless there is an additional legal documentation drawn up to protect the cosigner. However, as money matters and family often do not mix, it is advisable to refuse such requests and find other ways to assist family in need without becoming legally obligated to pay someone else’s debts, risking your own credit standing that can cost you future financing.
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