Question about Credit Scores

[logicallefty]

To all Finance Experts on SS,

A buddy of mine is all balled up today. Two years ago he cosigned for his GF on a car loan. They broke up earlier this year and she continued to pay the car payments, but now she is telling him she lost her job and has to give it back to the bank. He says his credit score is 889 right now. How bad of a ding will this cause him if she gives the car back to the bank and he is the cosigner?

 

[Bible_Belt]

Each of the three companies has a different formula for scoring, and they keep it a trade secret, so there's no way of knowing the precise answer.

Obviously it will be bad, especially with a score that high. I never saw one that high when I did mortgages.

The only thing to do is to have his ex give the car to him instead of the bank. Then he can make payments on it to keep the loan current until he can at least sell the car for something and take a smaller loss. Try to keep her from getting more than 30 days behind.

 

[logicallefty]

Thank you Sir. And yes I am in the 800s with my score but that 889 seemed high to me too. The buddy is an Engineer and has a nice house and a 2013 truck and is a pretty straight and narrow dude (AFC in our terms but still a good friend lol). He must have really borrowed and paid off a lot of money over the years to get that. I don't know anything about his credit cards and that.

 

[dasein]

How upside down is the car? If it's way in the red, the credit rating isn't his only worry. The bank can sue him for the deficiency once it disposes of the car, and they won't be retailing it rest assured.

 

[logicallefty]

How upside down is the car? If it's way in the red, the credit rating isn't his only worry. The bank can sue him for the deficiency once it disposes of the car, and they won't be retailing it rest assured.

He owes 18k and the car is worth 9k. It's a 2012 car I can't believe it dropped in value that fast but it did.

 

[VikingKing]

I have terrible credit. Like a ... 690 I think. How much money will have to borrow and pay back in order to get it to a respectable score?

 

[Bible_Belt]

690 isn't that bad. The highest required score for a loan I have ever seen is 720, usually at auto dealers offering zero percent financing.

And to answer your question, no one knows. It sucks that such an important judgment of you is made by a secret formula, but the credit reporting agencies are scared that someone else might open a competing business if they knew the secret formula.

Get all three reports and look for easy fixes, like small amounts that might have gone to collections without you noticing. Paying off something like that should be a quick boost to your score.

Never be 30 days late on a payment. On the 30th day, they report the late payment on your credit. 30 days is a ding, 60 is a bigger ding, and 90 is the biggest.

 

[VikingKing]

690 isn't that bad. The highest required score for a loan I have ever seen is 720, usually at auto dealers offering zero percent financing.

And to answer your question, no one knows. It sucks that such an important judgment of you is made by a secret formula, but the credit reporting agencies are scared that someone else might open a competing business if they knew the secret formula.

Get all three reports and look for easy fixes, like small amounts that might have gone to collections without you noticing. Paying off something like that should be a quick boost to your score.

Never be 30 days late on a payment. On the 30th day, they report the late payment on your credit. 30 days is a ding, 60 is a bigger ding, and 90 is the biggest.

Oh. Well it must have been 590 then. Because credit karma scored me as having "poor" credit. Edit: 598. I owe a total of 5 groups money, a total of about 1600. As long as I keep my student loans at bay, that is all it will be. But its easy to put off student loans.