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Whose Credit Score Is Used On A Joint Auto Loan?

A joint auto loan can be an effective method to pay your vehicle faster and cheaper. However, borrowers should be mindful of risking their credit score for late or delinquent payments made on their loans.

A joint auto loan involves two or more individuals who agree to share the responsibilities in purchasing and owning a vehicle. Couples, family members, or friends usually consider a joint auto loan to reduce the burden of paying the loan single-handedly. All individuals involved are assessed on their credit history and ability to pay for the loan. It is important to consider if anyone participates in a joint auto loan, they are putting themselves in financial risk. Any late payments from one of the individuals participating in the loan can have negative consequences from everyone’s credit score. Another factor to consider is knowing the difference between a joint auto loan and a co-sign. A co-sign does not allow any secondary borrowers to share ownership of the vehicle but have the responsibility of paying it.

 

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