Question in title. For BMW Financial Services.
Yes, you can have a co-signer.
To clarify, can you add the co-signer during the lease? Not at initial application/assumption
Why? What would be the purpose for that?
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Gotcha. You can buy out the lease and have a co-signer on the financing of the purchase. What would the point of adding one to an existing lease be?
In order to help a family friend build credit. The account balance has been paid out for the rest of the lease so zero risk. I’d like to still retain my name on the lease though, and understand it’s an edge case
Not sure I want to buy out the car as the residual is probably going to be far greater than value at maturation
Gotcha. No, there isn’t a process for doing that.
Don’t quote me on this but in theory you could have them assume it with you as co-signer.
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Hmm, that would be an interesting approach. Would be $500+ for the lease transfer though
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Is this to build credit from a very thin credit file, or rebuild bad credit?
From a credit scoring perspective, an installment loan (which is how a lease reports) only helps while it’s open, so the impact will vanish when the lease ends and the installment trade line updates to status = closed.
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Confirmed with BMW FS this is a viable option. Standby as I swap into my own vehicle with a co-signer.
The said individual will likely continue to have an open account with BMW FS after this lease ends and take advantage of loyalty
Edit: building out a thin/early credit file
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When a lease ends, the trade line updates to status = closed.
If you get another lease, that’s a separate, new trade line.
This will lower the consumer’s average age of accounts, and it will replace the open installment trade line that was nearly paid off to one that has a 100% ratio of balance to total amount owed.
That’s a double negative.
If you really want to help, focus on helping with revolving history, as I posted earlier.
Closed but history stays on report till drop off point.
Not saying the utility = zero.
But it’s relatively low compared to having even a small handful of open, positive revolving accounts.
For credit reporting purposes, AUs inherit the age of a revolving account (except for Amexes). I have a Chase card that was opened in 1992 reporting. It’s an AU card on my mother’s account.
The benefits of an old, open revolver compared to a closed installment account aren’t even in the same universe.
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Agreed.
Installment loans from my experience are weighted heavier since FICO8. Not sure on FICO 9.
Why I lost my mind on Citi when they closed my oldest trade line a couple years ago and wouldn’t reopen/reattach.
I posted something in the credit thread on what’s different in FICO V9, mostly an adjustment to impact of late pays on otherwise clean bureaus.
And most car dealerships seem to still use FICO V2 or Auto Enhanced Equifax.
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