Cosigned loan is defaulted
Q: I have an issue with my credit, and I was wondering if you could advise me if I have any recourse in correcting the issue.
About 3 years ago, I agreed to be a cosigner on my sister's car loan. Upon checking my credit recently, I noticed that my sister had been more than 30 days late a few times during the past year. When I contacted Ford Motor Credit, I was told that my sister had called and had my name removed as a contact on the account. As a result, during the times she was late with her payments, I was never contacted and informed of the issue.
Before my name was removed as a contact, I had received calls letting me know when she was behind in her payments, and I took care of matters before it negatively impacted my credit. Since I wasn't receiving calls from Ford Motor Credit, I reasonably assumed the payments were being made in a timely fashion.
I feel that, since I am an established cosigner on the loan, Ford Motor Credit was negligent in removing my name as a contact, even at my sister's request. I agreed to assume responsibility for the loan should my sister default, and I have no problem accepting that responsibility. However, I feel like Ford Motor Credit did not take reasonable attempts to contact me so that I can act proactively and keep the account from entering default status and negatively impacting my credit.
I'm in the process of writing letters to Ford Motor Credit and request that the delinquencies be removed from my credit. In your experience, do you think I have a reasonable argument? Also, if you can advise me of the best way to correct the issue with my credit, I'd greatly appreciate it. Other than the delinquencies from Ford Motor Credit, I have spotless credit report.
A: The very best way to clean up your credit is what you are doing - asking Ford to remove those delinquencies as soon as you bring the loan up to date. Unless you already did pay, offer them this nicely as a benefit after complaining about being removed and not being contacted about it. Ask for the letter stating that Ford Motor Credit agrees to remove the 30 day "Lates" and report the account "Paid As Agreed" in return for bringing account up to date and subsequent timely payments. You do have a reasonable argument but so does Ford, unless it violated state law by removing a cosigner from the list of the contacts. I would check with an attorney unless you did it already. Hopefully, Ford will be reasonable.
If Ford refuses, then the last recourse is to dispute with the Credit Agencies. Unfortunately as a cosigner, you have the responsibility, so when trying to dispute with the Credit Agencies, tell them that Ford never contacted you, period. Don't get into details about the removal from the contact list, unless you have to.
If nothing works, then it is only matter of time to fix your credit back where it once was. I would estimate that you can recover your credit score half way in about 6 to 8 months.
Mon Aug 28, 2006 12:08AM | Copyright: www.bad-credit-advisor.com | More in Credit Repair Tips | Comments (0)
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