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Find out more'Should I be a guarantor for my son's car loan?'
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My son has asked me to be a guarantor for a new car finance arrangement.
Although I’m willing to do this, I’m also wondering what impact this will have on my perfect credit score?
A Which? Money member
'Your credit score should be unaffected, or could even improve'
Bill Wilkinson-Hoy, Which? Money expert, says...
Before you become a guarantor, the lender will carry out a credit check on you.
However, this is normally a ‘soft’ credit search. Soft credit searches aren’t visible to other companies and won’t affect your credit score – it doesn’t matter how many of these searches are made.
Being a guarantor in itself shouldn’t affect your ability to get a mortgage or any other form of credit.
And if your son keeps up his repayments, your credit score won’t be affected.
Soft credit searches aren’t visible to other companies and won’t affect your credit score
However, if you have to cover any of the borrower’s repayments, or the loan falls into default (which leaves you responsible for repayments) this will be added to your credit report.
If you fail to repay the money owed, your credit score will be affected.
But if you continue the repayments or pay off the loan completely your credit score should stay the same or even slightly improve.
If your son successfully repays the loan, then there should be a positive impact on their credit score, but there won’t be any positive effects for you.
- Find out more: How to check your credit score for free
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