Welcome to the Money Blog. If you like what you read, you can subscribe to our RSS feed. You can also add a post to Digg or other sites using the icons below each post. Thanks for stopping by.

If you are considering having an automobile loan co-signed or if you are considering being a co-signer, there are several things you need to remember.

car_keys.jpgIf you have found that your credit score is not sufficient to borrow money for an automobile, you might have considered having the loan co-signed. A co-signer is basically another person with more established positive credit who is willing to guarantee the loan. In the even that you do not pay your monthly loan repayment amount, the co-signer is equally responsible for the debt. If you are a responsible individual, getting a co-signed automobile loan can help you establish positive money-borrowing history. The co-signer should be someone you trust to join you and to support you in establishing good credit.

If you are considering being a co-signer for an automobile loan, you should know the facts about what kind of commitment you are making. How will this affect your credit rating? Whoever you are co-signing an automobile loan for should be someone you trust to make payments on time every month. Remember, you are guaranteeing that the payments will be made and in exchange you are putting your credit on the line.

If the borrower you are co-signing for misses payments or defaults on the loan, you will be responsible for repayment or the loan will be placed in collection and will appear on your credit report. This loan can also affect your income-to-debt ratio. This ratio is taken into consideration when a company reviews your credit. On the other hand, if the borrower does make payments on time and fulfills repayment of the loan, this will reflect positively on your credit report, which is always a good thing!

Whether you are the borrower or the co-signer, always make sure you know what the pros and cons are of the situation.