If there isn't a current balance on the account, some credit card issuers may be willing to remove your name, provided the original borrower has decent credit. You or the original borrower can call and ask if this is an option.
Your best option to get your name off a large cosigned loan is to have the person who's using the money refinance the loan without your name on the new loan. Another option is to help the borrower improve their credit history. You can ask the person using the money to make extra payments to pay off the loan faster.
No, it doesn't hurt your credit, but having one can get credit history in your name because most times without a cosigner, you're not approved for an apartment or loan.
If you want to be removed from the account, you'll have to call the credit card provider and be prepared to negotiate. If the other account holder would qualify for the card on their own, the credit card company may approve your request. If not, your only option is to pay off any outstanding debt and close the account.
Cons of joint credit cards
Additionally, both cardholders are responsible for paying off credit card balances, no matter which cardholder incurred the debt. Difficulty reverting to a non-joint account: In most cases, a cardholder can't be removed from a joint credit card account.
You can remove the co-signer by refinancing your auto loan, receiving a co-signer release or paying off the loan. Before removing the co-signer, ensure your credit score is high enough to receive the same or comparable rate if you refinance.
It can affect your credit scores.
Because a co-signed loan is recorded on your credit reports, any late or missed payments can have a negative impact on your credit scores. If the borrower defaults on the loan and ceases payment, the debt may be referred to a collection agency.
In general, to qualify for co-signer release, borrowers must prove they have the ability to pay off the loan on their own, in addition to having no late payments for a set period of time, says Kaplan. The lender will also review the borrower's full credit history and assess current income relative to the loan payments.
“However, if you have a credit account that's two years old and an authorized user account that's eight years old, removing the authorized user account could hurt your credit score.”
You can often remove a cosigner at any point during the loan period. Your loan paperwork might dictate specific terms, though. For example, some lenders require 24 months of on-time payments from the primary borrower before they'll consider releasing the cosigner.
If you want to remove yourself as a cosigner before the loan has been fully paid off, you can try asking the lender to remove you as the cosigner. Some lenders may be willing to do so if the primary borrower can show that they can handle the loan on their own.
Each lender has its own criteria and process for removing cosigners, and some don't even allow it. So the best place to start is to contact your lender to find out your options. They may include: Co-signer release: An agreement to release the cosigner's liability after a certain number of payments are made.
How do I remove myself as an authorized user on a credit card? You can typically remove yourself as an authorized user on someone else's credit card, even without their help or approval. Call the number on the back of your credit card to request your removal.
By releasing your co-signer, they will no longer be responsible for your student loan debt; instead, you will be the only person responsible for repayment of the loan.
Request release from a co-signed loan
Co-signers can make a written request to the lender to be released from a loan. In certain cases, like some student loans, there may be a provision that allows a co-signer to take their name off a loan.
Cosigning a loan doesn't give you any title, ownership, or other rights to the property the loan is paying for. Your only role is to repay the loan if the main borrower falls behind on the payments or defaults.
Lenders may look at the credit score of both you and your co-signer. So, a co-signer with good credit — a score above 660 — may result in lower rates. The average auto loan rate for subprime borrowers on a new car is 12.28 percent.
At-A-Glance
If you cosign a credit card with a friend or family member, you'll be responsible for their debt if they fail to make their repayments. Becoming a cosigner can be a way to help a friend or loved one to build credit, but it could also put your credit score at risk.
What fees do you pay as a co-signer? As a co-signer, you may have to pay late fees or collection costs if the primary borrower doesn't pay their debt.
Many people are surprised to learn that a closed credit card account remains on your credit report for up to 10 years if the account was in good standing when you canceled it, but only seven years if it wasn't – if, say, it was closed for missed payments.
Pay off the loan
If this is a manageable option, you must contact the lender and pay off the current balance along with the payoff amount. Once the loan is paid off in full, the responsibilities of both the primary borrower and the co-signer will end.
Removing a co-borrower or cosigner from a mortgage is possible but difficult, and your lender may insist that you pay off the mortgage in full or refinance the house by taking out a new loan solely in your name.
Remember, the primary borrower legally owns the vehicle, so an auto loan co-signer cannot take over without the consent of all parties and a refinance loan.