by Adam | Apr 25, 2017 | Credit Repair
Being turned down for a loan can be discouraging, especially if you have little or no credit history to help you apply for another. To improve your ability to qualify for loans, you may consider asking a friend or family member to cosign on your loan. But does having a cosigner necessarily mean you’ll be improving your credit, and what will it do to your cosigner’s credit? What is a cosigner? A cosigner is an individual willing to assume responsibility for a loan because the primary borrower does not meet the qualifications of the loan on their own. A cosigner usually has better credit or a more stable income than the primary applicant, assuring the lender that the loan will be repaid one way or another. This means that the cosigner is required to make payments on the loan if the primary borrower does not, and it also means that the loan appears on their credit report, as does the payment history. Who can it help? A cosigner is especially helpful for a new borrower. As mentioned above, having little or no credit may make it difficult to be approved for a loan. Buying your first car or home may not be possible without a cosigner if you have little or poor credit. A cosigner may help you get a loan that can help you establish a positive payment history and build your credit. Having a new type of credit on your credit report can help both the primary borrower and the cosigner. A car loan or mortgage adds installment credit which can improve your credit score by adding...
by Adam | Apr 11, 2017 | Credit Repair
The precise formula for determining your credit score is information privy to the credit reporting bureaus (Equifax, Experian, TransUnion), and can vary between the different companies. Traditionally, the information on your credit report that determines your credit score is a mix of your payment history, amount owed, age of accounts, new credit, and type of credit used. But could additional lifestyle information, like the information we share on social media, become an additional tool that predicts our ability to repay loans? The Consequences of Over-Sharing While data from your social media presence is not currently considered when calculating your credit score, FICO CEO Will Lansing told the Financial Times that, “If you look at how many times a person says ‘wasted’ in their profile, it has some value in predicting whether they’re going to repay their debt.” Most people have at least heard the rumors, if not heeded the warnings themselves, that potential employers look up job applicants on Facebook, Twitter, and other online platforms to get a sense of their character before making hiring decisions. While certain laws protect applicants against discrimination based on gender, ethnicity, religion, etc. the line becomes less clear when it comes to voluntarily-shared lifestyle choices that could display unprofessionalism, especially toward a certain career. For example, announcing you were arrested for a DUI might not look so good if you’re applying for a position as a driver. But do lenders really see and consider the information you post online when you apply for a loan? Maybe. The Online Impact When an applicant with little or no credit history applies for a loan or...
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