Son's loan on credit file

bertiewhite · 17 January 2017 at 9:19AM

I've recently checked my credit report for the first time and found out that my Son's car HP shows up as a loan and is included in my overall long term debt.

The HP was taken out for £15000 in 2014 and he asked me to be a guarantor. I can't remember why I was required - it may have been the loan amount or it may have been his age. He has now left home, he is over 21 and the loan amount now stands at £9000 so is it possible to hand over responsibility of the loan to him or am I tied in for the duration?

He has always kept up repayments so is it actually better to have this loan on my credit report in this respect or would the fact that it adds to my overall debt be detrimental?

Trentenders · 17 January 2017 at 10:10AM

Being on the hook for £9,000 of someone else's debt surely can't be considered a good rating factor for prospective lenders, so it's not helping your credit file (it may well be helping your son's, as are the regular payments and decreasing loan amount)

The existing lender would only stand to lose by removing you from the loan, so I think that's a non-starter. Could your son perhaps look to refinance elsewhere on his own?

sourcrates · 17 January 2017 at 10:16AM

I wasn't aware guarantors for loans had anything recorded about that debt on there credit file ?

I would query that with the CRA concerned.

ashp_2 · 17 January 2017 at 10:35AM

sourcrates wrote: »

I wasn't aware guarantors for loans had anything recorded about that debt on there credit file ?

I would query that with the CRA concerned.

Agree with this. It should not be there providing he is all up to date payment wise (It is possible depending on the agreement) Do you have the same names? It's possible it could be showing on yours and not your sons if you have the same first and last name. Either way as above take it up with the CRA.

MrsTinks · 17 January 2017 at 11:14AM

Shamelessly stolen from Experians website:

When you guarantee a credit agreement you are taking on a degree of responsibility for the debt, but not in quite the same way as entering a joint credit agreement. While the terms and conditions of guarantor agreements can vary, we wouldn’t expect to see a record of the agreement on the guarantor’s credit report (as would be the case with a joint account), unless of course the agreement defaulted. In that case, you may well see a default registered on your credit report too and, if payment was still not forthcoming, perhaps a county court judgment as well. So, as long as the family member pays the agreement on time every month – which I’m sure they will! – the debt will not show on your credit report and should, as a result, have no bearing on your own credit rating.

MrsTinks · 17 January 2017 at 11:17AM

Interesting if you search different guarantor loan providers they don't agree- so amigo state it won't show on your file, yet others state they do. I suspect that this is down to the exact nature of the loan and if it's really a guarantor loan or if it's a sneaky joint loan disguised as a guarantor loan? Definitely challenge it though.

bertiewhite · 17 January 2017 at 12:15PM

The credit report is through Clearscore (Experian?), the loan is through GMAC and he is actually my Stepson so our names are different but the address is the same from when he lived at home.

My Stepdaughter's mobile Vodafone phone contract is also on my report. Again, there are no payment defaults but her address is different from mine on the report.

DCFC79 · 17 January 2017 at 12:47PM

bertiewhite wrote: »

The credit report is through Clearscore (Experian?), the loan is through GMAC and he is actually my Stepson so our names are different but the address is the same from when he lived at home.

My Stepdaughter's mobile Vodafone phone contract is also on my report. Again, there are no payment defaults but her address is different from mine on the report.

Why is your step daughters phone contract on your report, did she actually take out the contract ?

bertiewhite · 17 January 2017 at 12:55PM

DCFC79 wrote: »

Why is your step daughters phone contract on your report, did she actually take out the contract ?

I can't remember exactly why. It was 3 years ago now and she would've been 16 at the the time with a part time job. The payments were coming out of her bank account so maybe I was needed as a guarantor again? As far as I'm aware she is no longer on that contract but I'll double check with her. Again, I only registered with Clearscore a couple of days ago so I didn't realise that these accounts were still tied to me - I'm glad I know now.

MrsTinks · 17 January 2017 at 1:16PM

She wouldn't have been able to obtain a phone contract in her own name at 16. So I will assume you took it out for her or something strange happened there. Where the payments came out of makes no difference, at 16 she couldn't take out a credit agreement - that doesn't become possible till 18 unless she did't disclose her true age?

Unless your step sons loan has defaulted then it shouldn't be on your file from what I can tell. That said, now he has a good history you may find that he can get a much better deal and without you as a guarantor - I would advise him to shop around for a better loan deal.

DCFC79 · 17 January 2017 at 1:50PM

MrsTinks wrote: »

She wouldn't have been able to obtain a phone contract in her own name at 16. So I will assume you took it out for her or something strange happened there. Where the payments came out of makes no difference, at 16 she couldn't take out a credit agreement - that doesn't become possible till 18 unless she did't disclose her true age?

Unless your step sons loan has defaulted then it shouldn't be on your file from what I can tell. That said, now he has a good history you may find that he can get a much better deal and without you as a guarantor - I would advise him to shop around for a better loan deal.

Thats what I was thinking re the phone contract.

Son's loan on credit file

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