You might have bad credits and there are chances to show discrepancy in your credit report. Even if you fix the errors, the instability makes the lender hesitate to grant you a loan. So when you avail a bad credit auto loan, make sure you walk in with a co-signer who have a good credit score.
Yes, a co-signer is a person who agrees to pay on behalf of you, if you miss or stop making payments against the loan taken.
Choosing a co-signer is the toughest task, as you have to wary a lot on who will agree upon the loan terms and willingly pay the monthly payments. You should obviously choose a person who is sure about you, knows your habit and can feel the financial situation from close. It may be your parents or may be a close family friend or a well-wisher. However, keep in mind – he or she must have a good credit score to support your payments and lender must review it to reduce their risk.
In case, a college-goers buys a car, his or her parent can be the co-signer as he does not have credit score at all. As for people landed up with bad credit a friend in strong confidence can be the ideal partner.