Taking credit in your own name and giving the cash to someone else - what could go wrong?
Mary J was invited by SPHEctacula and DJ Naves to share her views on the topic of taking credit to loan to someone else, and what to be aware of.
Every day, people either take out loans for other people, or sign guarantorship for someone else’s loans. If, for any reason, there are defaults on the agreement you could be putting your credit record at great risk and this can take several years to recover from.
According to reports, these are the top three credit items that concern lenders: taking out too many loans, taking debt for someone else, and lots of ‘hard’ credit enquiries.
Every time you apply for credit, the lender will draw a credit report on you – something known in the trade as a ‘hard’ enquiry. Too many hard enquiries to check your credit worthiness can negatively impact your credit score as it can be seen as a sign of financial stress.
By now you’ve also heard of the Tinder Swindler (and if you haven’t, just google to find out). Money and love can get messy. Today we explore briefly what to consider when thinking about taking a loan for someone else, in your own name.
Questions explored included:
- Why do financial systems allow for someone to take out credit on behalf of a third party?
- Is there a limit on how many loans a single person can take out?
- What is considered a bad credit score?
- Is there any way to know who to trust when it comes to money?
Listen to the 6mins podcast below.