Module 3: Growing Credit

Chris wants to get a cosigner for a car loan. Which person would be the best choice?

A person with good credit history and a car and house.

Why would a borrower get a cosigner for a loan?

They can't qualify for a loan by themselves.

How do lenders evaluate if a borrower or cosigner will pay them back?

Capacity, collateral, character

Chris asks Sarah to cosign, but she says that she doesn't have a good credit history. Which of the following make her unable to cosign for Chris?

She has made late payment which affects her character.

What is the correct definition of a cosigner for a loan?

Someone who will promise to pay a loan if the borrower doesn't.

What is the correct definition of collateral for potential cosigners?

The cosigner's assets, such as a house or car

What is the correct definition of capacity for potential cosigners?

The cosigner's credit history

What is the correct definition of character for potential cosigners?

The cosigner's current financial situation.

Which of these criteria make a person a good cosigner?

They have a steady job.