Question:
Dear Steve,
My cousin went to the dealership to get a car but, when got there he was told he needed a cosigner.
He called me and asked me if I could cosign on his new car because my credit is a little better than his. But my credit is still only about 620 because I just started building it.
The dealership ran my credit and said he was approved but they need two of my recent pay stubs. I called him back and told him I won’t be able to release the pay stubs until Monday. 2 hours later I received a phone call from my cousin saying that everything went through and it’s okay they don’t need the pay stubs.
So even though I wasn’t in the dealership apparently I am a cosigner all my cousins vehicle. While my cousin was at the dealership I noticed about 10 new enquiries pop up on my credit report.
I want to know can I dispute 9 of those enquiries because I did not know the dealership was going to do that many. I thought my credit was only going to be run one time, is this going to affect my credit score?
Also my birthday is in July and I wanted to get a car for myself, so will this now prevent me from getting my own car loan?
Last question is it possible to be a cosigner on a car even though I was not in the dealership myself to agree to this?
Serenity
Answer:
Dear Serenity,
Wow. There is a lot to deal with here.
I understand you were just trying to do a nice thing for your cousin but there are a lot of worrisome issues here.
The first alarming issue is if you were added to the loan documents without authorizing it. But we don’t know what you might have signed when you stopped by the dealership. It seems you signed something when they ran your credit.
The fact there were a number of inquiries at one time is not unusual. Dealerships may send off the application to multiple companies to see which will approve it. Each application may result in an inquiry.
Credit bureaus will typically lump all these inquiries into only counting it as one. As Experian says, “The practice of counting multiple auto loan inquiries as just one enables you to shop for the best rates and terms without hurting your credit scores. The same applies when shopping for a mortgage loan.
However, each inquiry made will still appear individually on your credit report so that you have a complete record of who has accessed it. At Experian, inquiries remain on the credit report for two years.” – Source
Experian also says, “While inquiries remain part of your credit report for two years, the longer ago they occurred, the less they will affect you. If your credit history is good overall, it’s unlikely that your application would be declined based on inquiries alone.”
I am very concerned that you might not fully understand the role of a cosigner. As the cosigner, you are 100 percent responsible for the loan if your cousin defaults. Your cousin’s payment history will appear on your credit report and this loan may prevent you from getting your own car loan.
As far as lenders and your credit score are concerned, if you are the co-signer on this loan, you now have a car loan in your name. You just have the liability of the debt without the benefit of the vehicle.
I would absolutely urge you to go to the dealership and ask for a copy of any paperwork you might be a part of. Directly ask them for a copy of the finance agreement to make sure you are not listed on it if you did not authorize it.
You might want to contact a consumer attorney in your state that deal with automobile issues.
My fear is you started by thinking you were doing a good thing to help your cousin but wound up on the hook for a car loan you feel you did not authorize.
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Asked question.
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Steve, she seems to have said that she never went into the dealership. It seems you misread her. However, if they did a credit check on her, maybe she gave someone her private information. But Serenity can’t legally be a cosigner without her consent. Your friend, Gordon Wayne Watts in Plant City FLORIDA Google me or see my guest post on your blog about the Supreme Court college loan intervention f you’ve forgotten. 🙂
Thanks Gordon. I read her question as if she had visited the dealership when her cousin called but was not there later when the deal was signed.
You are correct, if she didn’t even visit the dealership to begin with that just gives it an added layer of sketchiness.
Thx, Steve. Maybe Serenity will tell us how it turned out. 🙂