I Co-Signed For a Student For My Ex-Girlfriend And I Want It Off My Credit Report

Question:

Dear Steve,

I co-signed on my ex-girlfriend’s student loan. The loan is now in collections. I am in the process of trying to qualify for a home loan, and the student loan is showing up on my credit report.

Is there any way I can be released as a co-signer on this student loan?

Nick

Answer:

Dear Nick,

Yes, pay it off in full or see if the lender will release you if you pay a substantial portion of it off. Some co-signers have negotiated a release but don’t be surprised if the amount they agree to is 50 percent or more of the debt.

Just to be clear, this is the exact role and purpose of the co-signer. The co-signer is 100 percent responsible for the debt if the person who gets the loan does not pay. The co-signer isn’t there to help them qualify. What the co-signer agrees to is to pay the loan if the borrower defaults.

As the co-signer, the loan will show on your credit report. Afterall, it is a loan you are responsible for.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

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This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.