It already took a hit. Pay it off so it shows up as a being paid and not a charge off on your report. Paying that off will not bring your credit score up high, if at all. The only thing that will do that is time.
Well depending on the kid MAYBE this is valid…I’ll give you that. If I had a kid and co-signed he would know to pay or he would be paying with flesh. LMAO. I thought the thread was more about adults co-signing for other irresponsible adults so I spoke with only that in mind.
Even still…there are plenty of avenues for kids to build credit without a co-signer. And most kids want co-signers for a hot whip or other piss poor “investment”. I’d not want my kid getting involved in the debt machine, becoming a debt slave. But I realize I’m not down with the mainstream, debt enslaved masses. LOL. Loans are great if you are going to MAKE $ above and beyond the principal and interest payment. If you don’t get income, or appreciation on the asset (or both) credit is a horrible idea!!!
I wasn’t implying that his score would go up, but that the account in collections will show up on his report until it’s taken care of. Most lenders will see that as a sign to stay away. So we were saying the same thing really.
I work at a bank and I would highly suggest before trying for any loans that you get all of your collections paid, get some credit, use it here and there for 6-12 months. Save up for a big down payment and then you’ll get a decent loan. If your credit is till rocky, community banks are sometime more willing to work with you.
It’ll still be somewhat rough because collections stay on your credit for 7 years. That’ll always be a question. When going for a loan be up front and say look “2 years ago, etc… I got myself into trouble. Now I’ve cleaned up, etc…”
And anytime your having issues paying your bills. Atleast make an effort even if it’s less than the min payment. That’ll stop things from going into collections, the only reason stuff goes into collections is because there was been no activity or willingness shown to pay for 60-90 days.
Responsible credit use is a good idea. I did the beater car thing with a part time job while going to school and quickly found out that getting a loan for basic reliable transportation was a lot better plan. Having a set payment every month is much easier to plan for than having major repair bills every 4 or 5 months.
If my kid is as responsible as I was at 18 I would have no problem cosigning on a car loan for her, assuming I approved of the car. 10 year old 100k mile Audi when you work part time, no. 3 year old 20k mile Focus, probably. 3 year old 20k mile Civic that you found for the price of the 3 year old 20k mile Focus, I’ll take the day off work to help you get it RIGHT NOW. Shit, here’s my credit card lets buy it over the phone. 
Nice. You must have had parents that taught you about debt and how to use it properly. Sadly most don’t, and even more sad is most NEVER learn from mistakes. Most parents carry 10+ cards and if they are platinum they are looked at as rich, HAHA. I remember how I used to be in awe of my dads wallet and selection of cards in there. WOW have times changed for me.
Congrats on being wise with credit! 
I understand what you are saying, but its going to stay on his credit report since it has been sold off to collections. Paying it off will not make it just “go away” it will be there for the next 7 years. It will just show that he at least made good on paying it, which is better than not paying it.
thanks guys, very useful info.
i’ll edit my statement:
If you are a cosigner for anybody other than your spouse…you are RETARDED.
IMO, that is the only situation where you have a benefit to being a cosigner. If you can lower the interest rate for your spouse, which means it lowers the payment for yourself since you share the bills. Anything else, you’re opening yourself up to nothing but risk.
^^
this… only cosign out of those bounds if you would be willing to give the item as a gift to begin with (or if needed)
I have come to the painful realization that if you get denied you dont really deserve/need what you are trying to buy. Granted you can afford it, but you really shouldnt at this time for one reason or another.
Its just the shitty game you have to play with the American credit system
buy a house, then lenders credit concerns seem to go away.
My credit has been crap ever since being laid-off many years ago and falling behind on credit cards and loans. I even went the credit counseling route and owed up to my debt. But no one would lend to me because of this history. Then I bought a house and now it seems every lender out there is coming out of the woodwork to offer me credit.
How did you buy a house with shitty credit and no job?
I have a job, the lay-off happened years ago. My credit was shitty because of my history from many years ago. Lenders usually don’t lose money on houses when people default. So I got the mortgage because they actually consider your current situation and income more important than your history. The only stipulation was requiring me to put 5% down.
I’m just stating the total nonsense of the credit game:
creditors wouldn’t talk to me because of my history…
got a mortgage regardless of that history…
now same creditors want to talk to me…
Guessing all prior to the economic downturn.
just buy another Lt1
problem solved
it was a couple months prior to the downturn.
So many of these in our society. Like most good jobs, you can’t get hired without relevant experience. But you can’t get relevant experience without getting hired.
it makes perfect sense… now if you accumulate a lot of debt with them and don’t pay, you have assets, which means you can have judgments placed against you much more easily.
Happened to me. I had to have a parent cosign my Suby as it was my first big purchase and little credit history. Also got me a nice low interest rate.
I agree this is probably the only situation I would ever cosign for someone myself. Suby is nearly paid off and never been late or missed a payment.