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late payment on credit report

Date: Wed, 03/16/2011 - 20:41
Submitted by on Wed, 03/16/2011 - 20:41
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I have co-signed for my best friend to buy a sports car. My friend is a responsible person. So, I didn???t hesitate to co-sign for his loan. I went to London for an official trip. I was there for few months. However, after returning from my trip, I decided to check my credit report. I received a shock when I found that a late payment has been reported on my credit report. I am never late on my payments. On checking, I found that my friend has defaulted on car loan. But what can I do for this? I have not defaulted on the loan !! How should I deal with the situation?


As you've cosigned for the loan, you are equally liable to pay the car loan as your friend. As your friend defaulted on the payments, the late payments got reported on your credit report and lowered your credit scores. You should have a word with your friend and start paying off the car loan so that it does not affect your credit further. After there is some equity in the car, you can ask your friend to refinance the loan in his name. This will remove your name from the loan and you'll not be held responsible for the payments anymore.


Submitted by Anna Sweeting on Wed, 03/16/2011 - 21:20

Anna Sweeting

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Hi!
Welcome to the forums!
You have committed a mistake by co-signing for your friend. It is not advisable to co-sign for a loan unless you are absolutely sure that the borrower would make the payments on time. Now you are bearing the brunt of his mistake. The late payment will remain on your credit report for 7 years now. You have to options - either pay the loan yourself or ask your friend to do it. Ask your friend clearly whether he/she can repay the loan. Otherwise, he/she can settle the debt with the creditor. You should also request her/him to tell you in advance when she/he can't afford to make the payment. This way, you can make the payment to the creditor on his/her behalf.

In the worst situation, you may get some protection from Servicemembers Civil Relief Act. However, you have to check whether you qualify for it.


Submitted by Good Nelly on Wed, 03/16/2011 - 21:42

Good Nelly

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You said your friend was "responsible". How did he/she get behind in the payments? Was it a temporary setback? Can you help get the loan caught up?

Unfortunately you learned the hard way not to co-sign for anything. I co-signed lease fo my daughter and had to cough up $2,500 to avoid her eviction. She's bipolar and has money handling issues, but it still cost me dearly.

It's time for a chat with your friend.


Submitted by aubrey on Wed, 03/23/2011 - 05:49

aubrey

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