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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308881  
Subject: Re: Niece, Nephew and, oh yeah, My Money Date: 6/26/2007 10:50 PM
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As other have already stated DO NOT COSIGN.

We have turned down a number of relatives who have requested we cosign. The last was my BIL. He saw a 10 cylinder behemist and couldn't qualify. He is not in a position to feed it. A week later he paid cash for a small used pickup that has reasonable gas mileage. For his work, he does need a pickup. A few weeks later he was in the hospital. He had lost he job because of the illness and was on state disability.

Every so often I receive incorrect collection calls. After notifying them that I don't owe them anything, there next question is "Have you ever cosigned." The answer is NO.

1.) Almost anyone can qualify for a car loan. Since she has been turned down for a loan, she has a right to a free credit report. She probably has not used her annual free credit report. The first step is to see if she has already done stupid actions with credit cards or is a victim of identity theft. Much identity theft is done by family members. If they upbringing was turbulent and there parents are financially irresponsible, it is possible that a close relative could have used their identity.

Assuming no identity theft, she is either attempting to buy a car that is inappropriate for her income or she is unwilling to pay the interest rate. She needs to look at a cheap used car which will also keep insurance low. Separate from the car loan, you could consider loaning her enough for a down payment (less than a $1,000). She will have a car loan to repay to build her credit. Your loss is limited to the downpayment. Since you aren't on the car loan, your credit rating isn't at risk.

3.) They aren't ready. It will only give them the impression that you are a target for money. They and you are to young for the threat to decrease their inheritance to be any significant threat. If either attend college, funds in their name will reduce any financial aid for which they might qualify.

What are their plans for their careers? If either are going to college or trade school, helping them plan on how to handle the costs and some assistion with tuition would be better than giving them cash now.

Debra
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