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Are you finding that you are having issues with signing a lease for an apartment or purchase a different vehicle because your credit history is not up to par? From my own experiences, I have found that when you need DIY credit repair advice, there is a simple formula to follow. In other words, if you are running up against major issues getting your credit score repaired, you may need to evaluate if you are following the basic steps. After all, I was able to get my credit fixed without paying a professional, and I no longer need a cosigner for my loans. The whole process only took me six months.
Is it possible to get a cosigner off my car loan?
If you are willing to work on your credit history in a productive and proven way to increase your credit score, you can easily get a cosigner removed from your auto loan. Naturally, the hardest part is knowing where to start. However, I found that my credit history immediately changed once I put my money in all the right places. Despite having over $40,000 in debt due to student loans, I increased my credit score from poor to fair in less time than expected.
Related Reading: 5 Easy Steps To A Car Loan with Bad Credit
How long do I need to expect to work on my credit before I get a cosigner removed?
When you have all of your credit reports in front of you, and you are ready to see results, perseverance will be required. While you might want to change things overnight, the reality is this will take you four to six months to see a change in your credit history. If you have other factors going on like identity theft, your credit score may not change until your credit history has been fixed.
Regardless, once your credit history is accurate and you are working on your credit score to improve the numbers, you will be able to take the cosigner off your auto loan within six to eight months.
Related Reading: Eliminate Your Fears About Getting an Auto Loan With No Credit History
What steps do I need to take to have a cosigner removed from my car loan?
Once you are ready to meet your no cosigner goal, there are specific steps to take first. One thing to keep in mind is that fixing your credit history and increasing your credit score can be costly. Depending on how high you want your credit score to be, you may spend at least $2,500.
Although it sounds expensive, the benefits of having a good credit score extend beyond getting a cosigner removed from an auto loan. To get started, use the steps below and be sure to bookmark this page for future reference in the weeks or months ahead.
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Get a free credit score and credit report.
One of your first steps to improving your credit is to sign up for an account for a free credit score. Major credit bureaus will give you an idea of what your score is, and they will also provide a view into other facets of your credit life. For instance, if you have a student loan, it will show up as being fair if it is being paid off in increments. It will also show what your debt to income ratio is.
Nonetheless, keep in mind, a credit score is different from a credit report in that they are two separate documents. A credit report will show a long list of information such as any names you have ever used, your criminal background, all of your former addresses, any credit cards you may have had, all of your private loans and other personal information.
Dispute any incorrect information.
Whether it is a name you never used that is found on your credit report or an incorrectly reported income amount by the IRS, it is up to you to dispute any incorrect information. You can do this by reaching out through the credit bureaus and letting them know that the information they have is wrong. You can also file paperwork with a lawyer or credit history repair service to remedy the situation.
Pay off any small immediate debts.
Once you have an idea from your credit score about which debts you still owe, the next step is to figure out which of the smallest ones you can pay off first. Often, minor issues are holding up a person’s credit report such as a residual unpaid utility bill.
Once these small bills are paid off, your monthly credit score will show an improvement. If you were able to pay off all of your smaller debts within a short time, you would have made an essential step to getting other forms of credit to build your credit score further.
Start a payment plan for any remaining debts.
If you have some outstanding bills that are not related to a mortgage, car payment or student loan, the best step is to start making a small donation to the debt holder. This can mean paying the minimum amount of $5 per month. As long as you were making a good-faith effort to repay the loan, this will help to improve your credit history.
Of course, the more you pay off per month, and the quicker you pay it down, the more likely your credit score will improve to the point where you can become qualified for having cosigners removed from your loans.
Get a secured credit card.
Have you had issues getting a credit card that you signed up for? An excellent way to counteract this is by getting a secured credit card. Often available through your bank, a secured credit card does not offer you free money. Instead, it is specifically used to build credit, and you loan yourself the money. Most of the time, a secured credit card starts with a deposit of at least $300.
At any point, you can use the $300, but you must pay it back by the due date, or you will get penalized. Depending on the card type, they may require you to pay a minimum every month, and if you do not pay it, they will charge you a flat rate.
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There may also be monitoring on the card by credit bureaus to see how often it is used. A good rule of thumb with a secured credit card is to only use up to 20% of the funds available at any time. This will help you to get offers for other credit cards that are not necessarily secured credit cards.
Get a secured loan.
After you have good luck with a secured credit card, another significant step could be getting a secured loan. Often, these will start at around $2,000, and it is the same idea as the secured credit card. You give your account $2,000, and at the end of the month, you make sure that you have paid it all back. This can be particularly helpful for any recurring bills because by paying them with a secured loan, you are building your credit card history each month with each transaction.
Contacting your loan officer about cosigner removal.
Did you check your credit score and see it is in a much better place? Watching your credit score increase by 100 points or more within weeks can be thrilling, but it does not mean your credit is ready for cosigner removal. Instead of having your loan officer check your credit score formally (which can cause your credit history to show too many inquiries), call to see what they think of your credit score.
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If they think your credit score is in the target area to have cosigners released from your auto loan, they will proceed with the paperwork. Nevertheless, do not be disappointed if they say the age of your credit is not old enough. If that is their reasoning for not taking off the cosigner, be sure to follow up with a question about how old they think your credit needs to be. In most cases, depending on the size of the loan, your credit score may need to have six months or more of being in good standing.
Related Reading: What Is An Auto Lease Capitalized Cost Reduction?
What if I have not been able to get a credit report?
Did you try to find information online for a free credit report, but they are saying you are not registered? My roommate had this issue, and the way we fixed the problem was by having our landlord file his Social Security Number with the three major credit bureaus.
Did a particular credit bureau score drop unexpectantly?
This requires filing formal paperwork found at their website, and it is best to give them a long-term address where you can reliably receive documents from them.
Is identity theft ruining your credit?
Addressing the issue to the credit bureau is only half the battle. You may also need to contact the identity theft resources provided by your state. State identity theft offices may need you to file legal paperwork such as affidavits.
