How to Get a Cosigner for a Bad Credit Car Loan

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A car loan is a necessity for many vehicle buyers and if you have bad credit you may not be approved. When it comes time to purchase a new or used car, your credit score can be the difference between driving away in the car of your dreams or having to purchase another bus pass.
A cosigner is someone who signs an official document (such as a loan or contract) with another person. To cosign involves a legal obligation by the cosigner for the loan amount or other contractual obligations.
If you have checked your credit score, and it’s far from “good,” you may need to have a cosigner for your car loan.

The importance of credit

First, before you know if you need a cosigner, you have to understand whether your credit is considered “bad.” To get your credit score, you have many free options, including CreditKarma and In addition, credit card companies such as Capital One’s Credit Wise program offer credit checks for anyone, regardless of whether you have one of their cards. You can also purchase your credit report from any of the major credit bureaus.
On average, the three major credit bureaus, Experian, Equifax, and TransUnion, use the following general FICO ranges to determine if you have good or bad credit:
  • Bad: 550 and below
  • Poor: 550-649
  • Fair: 650-699
  • Good: 700-749
  • Excellent: 750 and above
If you have a credit score of 550 or below, chances are high that you will require a cosigner for your car loan.

What is a cosigner?

In general, a cosigner is someone who is signing off that they will take over the car loan payments should you default or be unable to pay. This means a cosigner must have good credit themselves for you to be approved for a car loan. In addition, the cosigner must be able to prove that they could pay for the loan should the need arise.

How to get a cosigner for your car lease

While finance companies may differ slightly on their requirements for a cosigner, and it’s always recommended to check on all requirements before proceeding, for the most part getting a cosigner on your lease is simple if they can prove they are qualified for the loan.
Select your cosigner with care, as they will be responsible for the loan should you default and this could impact close relationships. Do your research on the loan before you approach your potential cosigner and be sure you are both clear on your responsibilities.

Benefits of a cosigner on a car loan

If you do have a cosigner on your car loan, there can be some additional benefits aside from being approved for the loan. The cosigner’s credit score, if high enough, could also result in lower interest or finance rates on your loan as well better approval odds on the loan itself.
In addition, as you will also be named on the loan, your credit score can benefit and improve as well, meaning you may not need a cosigner again the future.
Remember, if you have bad credit and need a new or used vehicle, do not take the decision of adding a cosigner to your car loan lightly. While there are definitely benefits, including higher chances of an approval on your car loan, should you default on your payments more than just the finance company is going to be impacted.

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