Thinking of buying an ATV or any kind of recreational vehicle or automobile? Do you or don’t you have a credit history? Maybe your credit history is good, or maybe it reflects a tough season in life. At Breeze Financial we understand all credit types and even the non-existent credits. We will work with you, but it may be beneficial to have a cosigner.  A co-signer is someone who will also sign for your loan.

When thinking about a possible cosigner, remember it must be someone who you trust and equally trusts you. A cosigner has to agree to take on full legal responsibility in repaying the loan if for some reason you are unable to. It is a big responsibility.

Before asking such a favour of someone, there are some things you should consider.

What’s the Difference Between Co-Borrowers and Cosigners? Co-borrowers are two (or more) people who apply for a loan together and take on equal responsibilities. They are both “on the hook” equally, and these agreements are usually for a spouse or partner, for instance. Cosigners would more likely be a parent or a relative signing on behalf of someone else, usually their child, and trust they will keep up with the payments.

Why would you want to be a part of a co-signing agreement? It will help with establishing your own credit score, as you make your regular payments, and may qualify for a lower interest rate.

Why wouldn’t you want to be a part of a co-signing agreement? If you are late on a loan payment, or for whatever reason stop paying altogether, the person who cosigned for you may experience damage to their credit score, or pay late fees or collection costs. In extreme examples, they could be sued or have their wages garnished. So, it is important that you don’t go into this agreement lightly. This is a serious commitment. Do you want this car/ATV/vehicle damaging your relationship?

If you do decide to go through with the cosign, what do you need? Both parties involved in the transaction will need to submit the proper paperwork to the lender, such as a driver’s license, proof of income, verification of address, etc. The cosigner will also most likely have a credit check done on them as well.

What kind of credit score would your cosigner need? According to ‘Experian.com’, the average credit score needed for a new car is 732 and for a used car, a credit score of 665. Should the co-signer’s credit score be higher than yours, then it simply puts you in a better position for obtaining the loan.

We hope this helped make cosigning for a loan easier to understand. Please let us know if there is any other way we can help with your financing needs!




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