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In March I agreed to be guarantor for my niece who was planning on attending college this fall.

In other words - you agreed to take on this obligation.

She signed a lease with University House in Fla and planned on moving in this August.

As her guarantor, this is your lease, too, just as much as if you were moving in.

Needless to say the plans fell through and she was unable to attend.

When was it determined that she would not be able to attend? Why did this discussion not occur at that point?

She is currently living with her mother (my sister) in VA.

From the school's standpoint, it doesn't really matter where she chooses to live. She signed a lease and has rented the living space at the school. The choice that she made to not attend, and therefore to not live there, is just that, a choice. It doesn't let her (or you as her guarantor) out of the legal obligation to pay the rent.

The issue now is UH is looking for August rent money (577.00/mo) and in a couple days September. (rent is due the 1st).

Which, according to the terms of the lease, they appear to be legally entitled to.

If you don't already have a copy of the lease, you need to get one, and see what the terms are.

They really have no policies regarding students who cancel or are unable to attend. The only thing they can do is offer it as a "relet" to walkins, or my niece can post it herself online. If there are no takers she (and myself as guarantor) will be on the hook for twelve months of rent. (6924.00).

They don't need to have a policy. She signed the lease, which obligated her to pay the rent for the entire year. As her guarantor, you agreed to pay the obligation if she could not/did not. Again, you need to check the lease to confirm, but from what you've described, you are on the hook until someone else agrees to rent the space.

What affect will this have on my credit (which is excellent at the moment) if UH decides to send this to collections?

A collections account will likely significantly impact your credit score. One time I was buying a house, I had a collections account incorrectly placed on my report (same last name, different first name, had lived in the same small city). It dropped my score nearly 100 points. I had good enough credit that I still qualified for the mortgage, even with the account on my report.

I suggested my sister try for a home equity loan/line of credit to make payments to UH but she wasn't sure is she would qualify.

Your sister is not legally on the hook to make any payments. You are. If your sister didn't qualify to sign as your niece's guarantor (presumably your niece approached her mother with this request prior to approaching her uncle), then I would agree, she is unlikely to qualify to get a home equity line of credit, as these days, HELOCs require pretty decent credit ratings.

I have considered taking out a personal loan and having my sister and niece pay me back, but am a bit hesitatnt at the moment and realize that would impact my cerdit score as well.

Taking out a loan would have significantly less impact on your credit score than having a collections account. It may actually even improve your score assuming that you make timely payments.

Any suggestions would be greatly appreciated.

1. At this point, you had better make arrangements to get the August rent paid TODAY, as you are already 29 days delinquent on that obligation. Come September 1st, UH can report the account as being 30 days delinquent on both credit reports - yours and your niece's.

2. You and/or your niece need to be proactive about getting the space leased again. When it is re-leased, you need to understand if you would have any further obligation - for instance, if the new tenant chooses to not live in the space during June and July, are you still responsible for the rent for those months? Are you responsible for any damage the new tenant causes? etc.

3. If you can't afford to pay the $577 each month yourself, without taking out a personal loan, it was a big mistake for you to agree to be her guarantor. Let that be a lesson to you, if in the future, you are asked to be a guarantor or co-signer for any other obligation. As the guarantor or co-signer, you are agreeing to make the payments, just as much as the borrower. If it would cause a hardship for you to make the payments, you should not agree to be the guarantor/co-signer.

4. You need to have a discussion with your niece about how the choices she has made have impacted you, and what she is going to do to make things right. In the mean time, if you don't want your credit score impacted, you need to pay the obligation, as you agreed to.

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