Cosigning is a great option for individuals with bad credit to raise their score. One way to improve your financial status and make life easier on yourself is by giving your credit score a boost. A credit card cosign agreement is one of the best ways to raise your credit. Credit loan cosigning is effective and low risk. If you have a relative or a good friend that you can trust sharing a financial matter with then this could be an option for you.
This is a common practice for a lot of people, especially young adults who have just graduated high school and will begin their first year of college. Parents will use the cosignment option to help them establish credit. For instance, let’s consider my neighbor John. John has good credit. John’s younger brother, Mark, has been experiencing financial difficulties and is concerned about what the next six months will be like. Ever since Mark’s credit cards went to collections last year he has had poor credit. He’s worried about applying for another personal loan because a rejection would have negative effects on his credit score. During conversations with his brother John, Mark has confided his worries and feels he has no place left to turn. John explains that Mark may still make a positive impact on his credit ratings if he would choose to cosign as a shared cardholder.
Here’s an opportunity to raise your credit with little effort.
If you’re in Mark’s position this agreement will help you to leverage for better credit opportunities. There is no requirement for you to use the card at all. In John’s situation, after cosigning his brother in this new agreement, both brothers are cardholders. However, John is only authorized to hold and make purchases. As long as John keeps good spending habits this will be enough to make a progressive and positive impact on both credit reports.
This is an effective way to strengthen a relationship and financial status. There must be a foundation of trust and respect to enter into the credit card cosign agreement. Understanding the obligations and the benefits helps. Positive and progressive reportings each month will allow Mark to open a card of his own.