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FOR THE LOVE OF MONEY: Fresh Azimiz Part 2
*When you think about old school dis' battles, who could forget KRS One, and my namesake, MC Shan? The stage was set. MC Shan gained famed with his hot tune, "The Bridge" (1986, featuring Marley Marl), talking about how Queensbridge projects in New York was the "home" of Hip Hop. Of course, this didn't sit well with rappers from other parts of the city, and KRS One countered with his response hit, "The Bridge Is Over" (1987).
In the spirit of the old school battles, that lead to the new school ones, here are three more Fresh Asimiz tips on co-signing.
3. Check your credit report twice a year.
Did you know that a co-signed loan will appear as a liability on your credit report? You may be doing your friend a favor, and you don't think that BMW is yours, but the credit folks don't see it that way. The entire loan may show up on your credit report and could stop you from being able to make big purchases for yourself ( i.e., a car or house).
Thus, you should check your own credit report often (twice a year) to make sure that your friend is, in fact, paying on the loan. Check out these websites for help on getting this bi-annual credit report:
§ https://www.annualcreditreport.com , a site, jointly-sponsored by TransUnion, Equifax and Experian, that offers a free annual credit report (the listing of all the information in your credit history).
§ www.myfico.com, allows you to purchase your credit score (the number used by lenders to determine if they will extend you credit) from all three credit agencies.
§ Also see, www.equifax.com , www.truecredit.com and www.experian.com .
§ For more on cleaning-up a credit report, see the Federal Trade Commission's "Building a Better Credit Record," at http://www.ftc.gov/bcp/conline/pubs/credit/bbcr.htm .
4. Help your friend clean up her own credit.
Since you have good credit, you obviously know what it takes to get it. Lead by example. Spend the next year helping your friend clean up her own credit. In fact, I would make this a requirement for the friend before you even co-sign on the loan. Your argument? You didn't help her damage her own credit, and you sure aren't going to help her ruin yours. If she wants your help, she needs to take all of it; even if it's painful.
Start by helping your friend get a free credit report (see tip # 3 above). She should also get rid of those high interest credit cards, and look at consolidating loan programs. Still not enough money to pay all the Bills, Bills, Bills (Destiny's Child, 1999)? Help your friend find a job or a second job. If she can show more income and a better payment history, even in a 6-month time frame, this can go a long way in helping her qualify for a loan.
5. Skip co-signing altogether and make a loan.
If you really can't tolerate the pressure from your friend, as a very last resort offer her a loan. Make sure to document the loan with a legal promissory note, or risk standing up on Judge Mathis pleading your position. In the worst case, she'll default on the loan, but at least your credit will be intact.
At the end of the day, remember that the choice to co-sign is yours. Don't ever feel pressured, by friends or family, into taking such a big risk and possibly losing everything without giving it some serious thought. Becoming "fresh asyouiz" is something you've had to work at. Others shouldn't get to come along on the ride for free.
Shannon King Nash is the author of the award-winning book entitled, "For the Love of Money: The 411 to Taking Control of Your Taxes and Building Your Net Worth." She uses song lyrics and entertaining stories ripped from the headlines to teach readers how to manage their finances and taxes.
Shannon is a CPA, Tax Attorney, and regular expert commentator on KJLH FM Radio in Los Angeles, and has appeared on national television. Contact the Nash Management Group at 818-986-2665 or visit www.nashgroup-usa.com .
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