When you cosign any form of loan or line of credit, you become liable for the amount of money borrowed. This may impact your ability to borrow money for yourself because a lender will include the amount of the loan you cosigned on as part of your 澳洲幸运5官方开奖结果体彩网:debt load when calculating your 澳洲幸运5官方开奖结果体彩网:debt-to-income ratio.

Plus, the payment history on the cosigned loan or line of credit is reported on both the borrower's and the cosigner's 澳洲幸运5官方开奖结果体彩网:credit reports. If you've agreed to cosign a loan for a friend or relative, but no longer want the responsibility🐼 of shared credit, how do you get your name off the loan? Fortunately, there are four key ways.

Refinancing

With a loan with a larger balance, having the person who's using the money 澳洲幸运5官方开奖结果体彩网:refinance the loan is the best option. This rule applies to most loan types, such as personal loans, car loans, private 澳洲幸运5官方开奖结果体彩网:student loans, and mortgages.

Loans with larger balances are h🎶arder to pay off within a few months, so refinancing may allow the borrower to reduce the amount of their monthly payments. The person will also be borrowing a lower amount, assuming that a significant portion of the loan has been repaid, which can mean they will be able to secure the loan without a cosigner.

You can also use a version of this strategy with 澳洲幸运5官方开奖结果体彩网:cr🔯edit cards by transferring balances to a new card under the person's name for ♛whom you cosigned. Let's say the credit card that's under botꩵh of your names has a $1,000 balance. If your friend or relative can get approved for a card for more than $1,000, the money can be transferred. Then, both of you can decide to close the current credit card (or keep it open, but unused). This strategy, however, works mainly for smaller amounts of money.

Improve the Main Borrower's Credit Rating

Options are pretty slim if the person you cosigned for has a not-so-great or minimal cre𝓰dit history. The five-step strategy outlined below focuses on helping the person improve their credit.

Step 1: Pull Credit Reports

AnnualCreditReport.com allows individuals to pull their credit reports with all three credit bureaus once a year for free. Your friend or relative can also purchase 澳洲幸运5官方开奖结果体彩网:FICO scores from TransUnion, Experian, or Equifax at myfico.com. This will tell you what their starting point is. Plus, there's an explanation of what factors are causing a lower score. Once the pe🌄rson you cosigned for improves their score,꧙ they may be able to hold the loan on their own.

ꦯStep 2: Evaluate What Problems Are Impacting th𒈔e Credit Score

Are there a lot of late pays on loans or credit cards? Are 澳洲幸运5官方开奖结果体彩网:credit card balances above 50% of the 澳洲幸运5官方开奖结果体彩网:available credit l✤imit? Does the person have recent run-ins with collections? Are there accounts that should be reported in good standing that show a late payment or went into collections for non-payment? If yes, these need to be rectified in o🐓rder to improve the score.

Step 3:🅘 Focus on a Few Issues Currently Hurting the Score

The strategy should improve the borrower's ability to obtain credit. It could be as simple as paying all bills on time for six months. If the person's 澳洲幸运5官方开奖结果体彩网:credit history is comprised only of the loan on which you cosigned—and it isn't an outstanding credit card payment—then your cosigner needs to open one credit card, keep the balance under 15% of the credit limit, and pay on time. This is because a large chunk of a person's credit score is how they manage 澳洲幸运5官方开奖结果体彩网:revolving debt such as credit cards.

Step 4: Develop a Plan With a Time Frame

If the🙈 only problem is misreported information, you can resolve these credit report disputes in about two months. Other actions should be given six months in order to make a noticeable impact.

Step 5: Check FICO Score Again

After a few months, check the borrower's credit score again to see if your efforts have made an improvement. As we mentioned, you might begin to see results in as little as a few months, although it might take up to six months to begin to see credit score improvements♎. If you do༺n't see much improvement, go back to the credit report to see if you've missed any areas that you can rectify to improve the score.

Pay off the Loan Faster

Another option for getting out of a cosigned loan is to ask the person using the money to make extra payments to꧋ pay off the loan faster. You may want to chip in on the balance so you can end the credit burden on your account.

Chipping in makes senses in two circumstances:

1. If the balance is a small amount that you can afford to pay and a late payment or non-payment has already occurred or is expected.
2. You are planning to buy a home or vehicle in the near future and cannot afford a ding on your 澳洲幸运5官方开奖结果体彩网:credit score.

Close the Account

With certain types of loans, the best way to get out is to close the account. This is best when you are a 澳洲幸运5官方开奖结果体彩网:joint account holder on a credit card or 澳洲幸运5官方开奖结果体彩网:line of credit. If there is a remaining balance, it will have to be paid off or transferred first. Apar𝕴tment leases can also be closed and reopened at the end of the lease by the person occupying the apartmen💫t.

If you or the other person is an 澳洲幸运5官方开奖结果体彩网:authorized user instead of a joint account holder on a credit card or other line of credit, the authorized user can be removed at the request of the 澳洲幸运5官方开奖结果体彩网:primary account holder.

The Bottom Line

One of the 澳洲幸运5官方开奖结果体彩网:risks of cosigning a loan is that at so💮me point you may no longer want to have your name on the loan. Fortunately, you can have your name removed, but you will have to take the appropriate steps depending on the cosigned loan type.

Basically, you have two options: You can enable the main borrower to assume total control of the debt or you can get rid of the debt entirely. Think carefully about whether you want to help the person pay off the loan. The goal is to 澳洲幸运5官方开奖结果体彩网:create financial security and financing options for yourself, not t𓄧o hurt your own finances by giving someone else money you can't afford—or that they'll just waste.