Credit affect of being a guaranteer of a lease
Can being a guaranteer of a lease for an apartment for our daughters adversely affect my credit score. They both have good jobs but don’t have a 750 credit score which is required by the leasing property in downtown Chicago. We had read that it wouldn’t be a hard inquiry on my credit.
Thank you
Terry Says
It absolutely WILL be a hard inquiry on your credit report. That, in itself, is not necessarily a ding on your credit. BUT, as guarantor, if your daughters fail to pay the rent on time, then it will have a definite impact on your credit.
I always advise against co-signing on loans for children or family members. In this case, I’ll ask why they have low credit scores. Is it because they just started working and haven’t got a long credit history? Or did they fail to pay some bills, and their scores are low for that reason?
They should get a secured credit card from a bank that requires a savings account as a deposit, which secures their line of credit. Then they can charge every month and pay ontime and in full, and that will build there credit. Find secured cards here.
Please use some judgement in co-signing. If they understand how to use credit wisely, and are building their own credit in the above manner, you should be safe. But if they already are in credit trouble, or are likely to get into it because they aren’t managing their new income very well, then it will definitely drag you down too!
