I’m applying for student loans and I have bad credit?
I have bad credit, yet my dad who has outstanding credit is cosigning for me. We got denied by Chase for a student loan. He makes a ton of money so could we have gotten denied due to my poor credit? I thought if there was a cosigner involved, they don’t take into account my credit history.
my credit score is roughly 500…his is over 800.
As a matter of fact there is such thing as to much credit, and in your dad’s case, thats what it seems to be, thats why he didn’t qualify also, but trust me, you can get it without cosigner, I did.
Same thing happened to me by also with Chase. I too have bad credit but my parents have great credit and I was denied. I ended up getting a loan through American Education Services…which turned out to be a huge mistake for me because I didn’t need all the money I borrowed and now I have to pay it all back. Have you looked into Stafford loans? Everyone qualifies for those no matter how much money you make and no credit checks they are government loans for everyone to use.
regardless of your credit you should be able to apply for student loans and get approved on your own. the only way you may be denied is if you’re in default with prior student loans. try other banks. did you fill out the FAFSA form?
Roll:
When evaluating a cosigned loan application, the lender does consider the primary applicant’s credit. Remember – even with a cosigner, the primary applicant (you, in this case) is the first debtor to the creditor. Having a cosigner doesn’t mean they can just ignore you when it comes time to collect – they have to start with you first, and THEN move on to the cosigner, in the event that they can’t get you to make voluntary payments.
If the primary applicant’s credit is awful, the lender doesn’t even want to get into the mess of dealing with you and then turning to the cosigner. If your application is saying “Don’t expect me to ever pay this, you’ll be dealing with my cosigner”, a lender will still reject the application, even if you’re offering a creditworthy cosigner.
The other point that you need to understand is that “perfect credit” or “very high credit’ does not mean that an applicant gets automatic approval on a loan.
When a lender evaluates a loan application, they look at your ability to pay the new loan – and your record in paying old loans is only somewhat informative to them.
Let’s suppose I make $100,000 a year, and I have a mortgage, a car loan, a handful of credit cards, and the usual monthly obligations (food, utilities, insurance, etc.). I have near perfect credit, because I’ve had these obligations for years, and I always pay them on time. My existing creditors love me, because I’ve never given them a moment’s concern.
So now I want to borrow $100,000 to go in with my friends on an investment in a wing restaurant. I have perfect credit, remember, so I’m going to assume that my loan will be automatically approved, right?
Wrong. The lender will calculate the ratio between how much I have coming in every month, and how much I currently have going out. Remember, I’ve got credit card bills, and a mortgage and a car loan, and all those other monthly obligations. The lender determines that 80% of my income is already spoken for – and that I wouldn’t be able to manage the additional payment on the $100,000 loan that I’m asking for.
They’ll reject me.
If your application was rejected, it’s either because they’re frightened of your credit history – and they’re not willing to go into the loan knowing that they might as well forget about you – or – because your dad can’t take on the new loan on top of his existing monthly obligations. It’s good to know that your dad pays all of his current bills, but the bank wants to know whether he’ll be able to afford adding yet another bill.
I’m sorry for the disappointing news that you received from Chase. Good luck to you.
I think it’s probably because of the economy. they’re getting ridiculous with giving out loans.