being a guarantor

evondoll

Quick question...

Does being a guarantor affect my credit rating in any way? I know if the loan is not repaid or payments are late it does.......but this question is talking about if the loan is always paid on time and no payments are missed.

All the info I can find only talks about credit rating being affected if payments are late or missed so I just wanted to check.

Basic info is my brother needs a loan for a new car. He doesn't have a bad credit rating...just he has no credit rating due to never borrowing before. He also moved home recently and hasn't put his name on the voters roll....so basically he can't get credit.
I know he can and will pay so I'm not worried about that.

E.

jonesMUFCforever

So says who?

Even if he has never borrowed before his bank would jump at the chance of lending to him if his credit rating is as clean as you say.

Has he even tried?

My motto never ever lend money to friends and family - this stretches to being a guarantor - it will turn bad IMO.

[Deleted User]

absolutely family and money DONT mix,do you know he will be in work for the duration of the loan?that he wont become sick?
his best bet is get a cc use it for 6 months,get on the electoral role THEN apply for a loan

horse76

Absolutely agree with the advice already given - don't be a guarantor even for family, no matter how much you trust your brother.

We've lent family money before, and even though it eventually got paid back, the stress of wondering if it would be ever paid off was unbearable to me - and there were alot of late payments. They just thought we were an easy accsess cash machine when they unexpectely needed cash for something. We eventually said we couldn't lend anymore, as we had our own credit ratings to keep clean - it's not worth it. Also were asked to be a guarantor for family, again said no as knew they were bad with not paying on time.

immoral_angeluk

Don't do it. Simple as.

CLAPTON

there are plenty of decent cars for 1-2k and if he can easily repay the loan then presumably he can easily save (and has been doing so)

smartpicture

I also lent money to a family member who definitely could and would pay, so it wouldn't affect my credit rating.

He didn't. It did.

What I do now is only give money as outright gifts to people, because that way it doesn't affect the relationship negatively and I know up-front exactly how much I'm going to lose. I suggest you think about how much you are willing to lose, and give him that much towards a car. If he's a decent brother, he'll give it back at some point, but that will be a bonus, not an expectation.

If you're determined to do it the other way, it would probably be advisable to ask your own bank what the implications would be, rather than asking the lender who wants to get you on board. It would however make sense that it would affect you in the same way as if you took out the loan yourself, because you have exactly the same exposure from a lender's point of view.