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Consumers Urged to Check Credit Report before Co-signing

By Faye Mergel
Published: Monday, November 23rd, 2009

Co-signing a credit card has been practiced by consumers for many years but it has become especially relevant recently. Since new federal regulations will not allow teenagers to sign up for any plastic unless they have enough income to qualify, more card applicants are expected to look for co-signers next year. But experts remind parents and other adults that teenagers can get cards on their own. On the other hand, those who are willing to co-sign for an account are advised to check the other person’s credit report first, or their own finances will suffer.

MOBUConsumers Urged to Check Credit Report before Co-signingParents are advised to remind their teens that a credit card is not housing or a ride to school. No one really needs it, according to specialists. They add that parents must show their teens options other than applying for a card. If they want to start their credit history early, parents are advised to refer their child to a store or secured card. Prepaid or debit cards are also cited by experts as excellent options for shopping this holiday season. They remind consumers that plastics are source of debt, and not income, so they advise cardholders to avoid using them as much as possible. Consumers are advised to pay balances on time to avoid delinquencies on their credit report, negative items which would make it difficult to get a loan when they need it most.

Specialists note that there are adults who ask their co-workers or friends to co-sign for them. They add that there are those who make the excuse that there are mistakes on their credit report that is why bankers refuse them. However, experts say such excuse is lame since mistakes on a credit report can be cleaned up for free. They add that card applicants must clean errors themselves before talking with a creditor.

Experts remind potential co-signers that if a card applicant is turned down, there must be something in his credit report which tells lenders that he cannot meet his payment obligations promptly. He could be carrying too many debts that is why a bank refused him, or would not issue him a card unless someone with good credit vouches for him.

Experts say signing up for a bad-credit consumer places a person in a very precarious situation and may end up seeing the same negative marks on his credit report. They tell consumers that the holiday is not an excuse to rack up debts, advising both potential co-signers and card applicants to remain conscious of their finances whole year round.

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