 TITLE: Does Repossession Affect a Cosigner’s Credit? CONTENT: What to Ask Before You Cosign\n-----------------------------\nBefore you agree to cosign a loan for someone, you may want to have an open discussion about their finances. It can be difficult to discuss money with friends and family, but it's important to remember that you're taking on the responsibility of a loan as the cosigner.\nYour credit is on the line as much as your loved one's, so it's a good idea to fully understand their debt history and ability to make their car payments before you make a decision.\nHere are some questions that may help you start the conversation:\n*   Why weren't you able to qualify for the loan on your own?\n*   Have you ever been late on payments in the past, including other loans or credit cards?\n*   Are you able to pay your monthly bills without using credit or borrowing from friends and relatives right now?\n*   How much will the monthly car payments be?\n*   Do you have a budget you can share showing how you will afford the payments?\nYou may find that the person couldn't qualify on their own because they have a limited credit history and needed someone with a stronger record of good credit management and on-time payments to strengthen their application. On the other hand, perhaps a friend has a few bad credit marks from a few years ago pulling down their score. They've since gotten better at managing their money and debts, but those marks still may be cause for concern.\nWhatever the reason, having context about their finances can help you make an informed decision about whether to cosign the loan. Ultimately, it's your decision to make based on what you know and what you might be able to find out if you ask.\nIf you choose to cosign, it could help to come up with a game plan with the borrower for what to do if they can't make their payments for a couple of months. Decide how you'll communicate about potential problems and at what point you'll step in to help with payments.\nAgreeing on how you'll communicate about the loan is important because the lender will only send bills to the primary borrower. The lender doesn't have to inform cosigners that payments are late or that the loan is in default. Consider talking to the primary borrower about whether they'll show you their monthly statements or provide account access so you can monitor the loan's activity.\nYou may want to keep a few months of payments in a savings account in case you need to help out with the loan for a little while. Ideally, the primary borrower will manage the payments for the entire life of the loan. But knowing that you have the money to keep the account in good standing in a worst case scenario may bring you peace of mind. END