Dear Let's Talk Credit,

How can I remove the information from my credit report due to the fact that I was the co-signer for a car loan? The main loan holder messed everything up. Was late on the payments, went into repossession, went back on payments and was late again. To make a long story short, I ended up paying off the balance of the car loan, because all of this was affecting my credit in a negative way very badly. I have a letter from the lender that the car loan was fully satisfied. What would be my next step, if there is any, to remove all that mess from my credit report? 

- KG

Dear KG,

Unfortunately, accurate negative information will remain on your credit report for seven years from the first date of delinquency. Because you were a co-signer on the loan, you are jointly responsible for the loan. As a joint owner, the account information is reported to your credit file and the information cannot be removed by the credit bureaus until the reporting period ends.

By paying the balance due on the account, you have already done what you could to improve the situation. Doing so accomplished two things. First, the account is not being reported each month as past due by the lender. Second, although the account is still considered a negative account, it is paid in full. Most people have made mistakes with credit. Anyone viewing your credit report while this account is still listed on your credit will want to know that the account was paid.

The good news is that this co-signed account will have less negative effect on your credit as you move forward.

If you do decide to co-sign a loan for someone in the future, it is a good idea to keep track of payments on the account to assure that it does not cause problems for your credit. You could make it a condition with the other signer that if you co-sign he or she will keep you informed. You would then have the option to make a monthly payment for your co-signer if he or she was unable and avoid any late payments on your credit report.

Keep in mind that when you co-sign a loan with someone, you are agreeing to pay the loan if that person is not able. If you cannot afford the loan payments, you should consider saying no to any requests to co-sign.

Let's keep talking!

See related: Co-signer, joint account holder, guarantor: Know the differences, 10 self-defense steps for co-signers, Options are few when a co-signed credit card goes bad