Dear Dr. Don,
I co-signed on a loan for my son. When I checked my credit report, I realized the loan was delinquent for about 90-plus days. How can I get this matter cleared up on my credit report since the loan is currently paid up-to-date but not paid in full? Also, if I have co-signed other loans for him, can I get my name removed from those loans?
— Sandra Signer
When you co-signed the loans you agreed to be responsible for the payments. The payment history on the loans is part of your credit history now. Late payments will stay on your credit report for seven years. Your son’s becoming current on the account will be reflected in the account information, but it doesn’t erase the past late payments.
It’s best to be proactive when you’re a co-signer. Keep track of the payments made by the primary borrower so you’re not surprised by late pays showing up on your credit report. It would have been optimal to receive copies of the billing statements sent to your son, or at least to have the ability to review the payment history online.
Without paying the loans off, the only way for you to get removed from the loan as co-signer is for your son to refinance the loan. It’s not particularly likely that he’ll be able to do that. He wasn’t able to get credit on his own when he first got the loans, and he doesn’t have a good payment history on the existing loans. I suppose another option would be to find another co-signer — but what are the odds of that when even his mother doesn’t want this responsibility?
To get a better understanding of the issues, and especially for other readers who are considering taking this step for a friend or family member, the Federal Trade Commission’s Facts for Consumers publication “Co-signing a Loan” does a great job of explaining the issues.
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