When you’re looking for an auto loan but have a bad credit score, a cosigner could help you get approved. But how do cosigners help, and what requirements does a cosigner need to meet? We’re here to go over the details!

What a Cosigner’s Credit Score Does

A cosigner is someone – typically a family member, spouse, or friend – that “lends” you their good credit score to help you get approved for financing. This can be especially helpful if you have a low credit score or no credit history. Having one might also help you qualify for a lower interest rate that you normally wouldn’t qualify for on your own.

A cosigner agrees to make the monthly loan payment if you’re unable to, but this doesn’t mean they should help you each month. In other words, you must be able to afford the monthly payment on your own for the entire loan term, and the cosigner’s income isn’t considered with yours during the approval process.

Your cosigner’s name also doesn’t appear on the car’s title, so they have no ownership rights to it. However, if you default on the loan, or start missing payments, both of you are at risk for really damaging your credit. Timely payments, however, can give you both a boost in your credit scores.

Cosigner’s Credit Score and Income Requirements

What Should My Cosigner’s Credit Score Be?Although there is no hard and fast number your cosigner’s credit score has to be, it does need to be in the “good” range. This means, at the very least, a credit score of 670 or higher is most likely required by most lenders in order for someone to be a cosigner. Your cosigner can check their credit score here.

Remember, your cosigner is sharing their good credit with you. If their credit score is poor, it isn’t going to convince a lender that the loan should be approved the way a cosigner with a good credit score can.

Additionally, your cosigner needs to qualify for the loan on their own, even though they’re not the primary borrower. The lender looks at the cosigner’s income and makes sure their debt to income ratio isn’t too high to ensure that they can afford the payment if you can’t. This means the cosigner must have enough disposable income to cover your monthly loan payment along with the rest of their bills.

Find a Bad Credit Car Loan With No Cosigner

If you can’t find a cosigner for a traditional auto loan, subprime financing could be your answer for car loan financing. Bad credit, or subprime, lenders work with credit-challenged borrowers, and they consider more than just your credit score. They use your income and overall stability to consider you for approval.

Dealerships that are signed up with subprime lenders are more available than ever – you just have to find them! This is where we come in.

At Auto Credit Express, we’re connected with dealers that work with bad credit lenders. To get started, you simply complete our free auto loan request form, and we match you with a dealership in your area. Plus, there’s never an obligation to buy anything. Let’s get to work!