Am I ruining my ex's credit?
June 11, 2010 1:08 PM   Subscribe

Am I really harming my ex financially, or is she just seeking to get back at me?

It's been two and a half years since I split with my girlfriend, and I've recently begun getting e-mail from her about a consolidation loan that she co-signed with me many years ago. There is still a (not insignificant) amount left on the balance. The loan is getting paid off, though, and I'm not in any trouble with the bank. She's demanding money now, I guess (she's not very specific, just nasty), but my wife and my debt plan doesn't put this particular loan as high on our list right now. She's demanded to be paid off in the past (for utility bills and such right after I left), and I have no illusions that paying this would make her go away. I don't feel like talking to her, as she is not a very nice person. Is it possible that I am really messing up her credit by paying at my current schedule? If so, I will pay it all off immediately. Anonymous because my MeFi handle is very transparent.
posted by anonymous to Work & Money (13 answers total)
What kind of loan is this? An educational loan? A car loan? You are putting her in a risky place emotionally. I wouldn't have wanted to be financially tied to an ex-boyfriend who is now married. Especially if he and his wife have other debts. I think she might be worried that you'll stop paying and harm her financially.

You should really put this higher on your debt list since emotional ties, now severed, are involved. You don't owe her anything emotionally and she knows this, and her risk is great. I would be scared and upset, too, if it were me.
posted by anniecat at 1:14 PM on June 11, 2010

I believe this could affect her credit, in her ratio of credit extended vs. credit used. If she is trying to get a loan for a car or anything else, the difference in interest rates that she may be able to get if the ratio were better may be significant. I am not a credit counselor.
posted by kellyblah at 1:16 PM on June 11, 2010 [1 favorite]

If she has cosigned on a loan, that counts as debt for any loan she might want to get now. Could you possibly renegotiate/refinance the loan so she is no longer listed as a cosigner? That way you don't have to pay it off, but you can release her from responsibility for it.
posted by headnsouth at 1:18 PM on June 11, 2010 [9 favorites]

a lesson i've learned a few times: any amount of money is worth it to shorten your exposure to a toxic situation, especially where exes are concerned.

is this your last financial entanglement with her? if so - pay it now and be done with it. if she comes sniffing around again, just refuse to engage with her. if you have other financial entanglements with her - take out a loan if you have to - and pay it all off.

if i were in your ex's or wife's shoes i would be pissed that 2 1/2 years later this is still going on.
posted by nadawi at 1:22 PM on June 11, 2010 [4 favorites]

Have you contacted the bank and asked if there are andy conditions under which they will release the cosigner?

As long as you're paying on schedule you're not hurting her credit in the sense of getting dinged for non- or late-payment, or having a debt collected on, but you could technically be dinging her score in the sense that her credit report shows more outstanding debt than she wants it to.
posted by owtytrof at 1:22 PM on June 11, 2010

I'm in your ex-girlfriends position. Co-signed on a loan for a former girlfriend. I have perfect credit, always pay my bills and am financially stable. She, on the other hand, is not and it scares me to know this loan is going to be on my credit for many years to come. Since everything else on my credit report is tip-top I'm not too worried about it, however that may not be the case with your ex. Depending on what the state of her credit it may appear she's heavily leveraged when infact she's not. The flip side is that if you're making payments on time than it also appears as a positive mark on her credit. In my situation the lender explicitly told me they can't remove me as the co-signer since the loan is too new. Depending on the status of your loan and your financial state you maybe able to remove your ex or have your co-signer switched to someone else (your wife perhaps?) either way a call to your lender is in order, and maybe an attorney if you really want to get this off your back.

Moral of the story to future readers of this question: Never EVER EVER co-sign on a loan for someone you're in a relationship with.
posted by Scientifik at 1:28 PM on June 11, 2010 [3 favorites]

Your question is not very clear. First of all, whose name(s) are actually on the loan as the borrower, and who is just a co-signer? Were you using the money together or was she just helping you out by being a co-signer? What kind of loan is this?

Second, do you actually owe her cash? You say she's just shrieking incoherently about the debt, but you're not justified in tuning her out like this unless you really definitely owe her $0. Did she make a payment on your behalf, does she want financial reimbursement for the ding in her credit you might be causing, or is she just pissed that you stiffed her $50 on the last utility bill? Since your question isn't crystal clear on who owes what in this situation, I am not so quick to believe you that she's just complaining for no reason. You need to listen enough to see if there is a legitimate claim that you owe her money.

It could be hurting her credit temporarily, but she probably wouldn't know that for sure until she went to actually apply for a loan. No one on MeFi has access to the exact formulas that the three credit bureaus use to calculate your FICO score, but credit extended/credit used is part of the formula. It would probably be better for her credit if this loan was paid off.
posted by slow graffiti at 1:36 PM on June 11, 2010 [1 favorite]

If I were in your shoes, here's what I'd do, given the emotional and financial baggage involved -- assuming the obligation was indeed mine:

"Dear ex,

I have been paying off the loan in question according to the terms of the loan, and there should be no significant impact to your credit score. However, I am well aware of the emotional and financial baggage we share from our relationship, and understand why you would prefer me to pay off this obligation in full.

To that end, it would be helpful to know if you are aware of any other obligations that we shar, that have not yet been resolved and closed. This list should include credit cards, loans, bill payments, and other obligations for which I am solely or we are jointly responsible, along with supporting documentation. After review and any necessary discussion, I will use this list to budget effectively going forward.

I may or may not be in a position to satisfy all such obligations that may exist in one lump sum, but rest assured I have every intention of fulfilling at least the agreed-upon terms of these obligations until such time as they are satisfied."

If there is any question of you possibly not being responsible, of course, you should simply ask for supporting documentation -- and make no soothing noises, lest she twist these into an admission of obligation that you are not actually prepared to take on.

Then, once you have the list, make a plan to fulfill the obligations (lump sum, continuing to make payments, whatever) and negotiate any questionable ones -- then send her a list of the obligations you're taking on, how long before you believe they'll be paid off, and that should be that.
posted by davejay at 2:27 PM on June 11, 2010 [1 favorite]

I would pay off debts that affect people other than you and wife first, it is not fair to do otherwise. Alternatively get your wife to replace the other people who are cosigners or take out another loan to pay that loan off now.
posted by meepmeow at 2:33 PM on June 11, 2010 [4 favorites]

I am in total agreement with the folks above who suggest that the problem is that her having co-signed on this loan is affecting her credit score because of the debt obligation she has undertaken. Pay off this loan or re-finance it without her as a co-signer. If you live in a community property state, your wife has to sign with you if you are married at the time of the loan origination.

While I agree with the essence of what davejay says, I strongly disagree with the way he suggests you go about it. Do not ever ask an adversary if you owe them something. They will come up with some debt out of left field that you would never have thought of. Instead, I would suggest a second paragraph that says something like, "Once this loan is paid off, I will consider all financial obligations between the two of us to be settled and resolved." Let her come up with any answer to that statement. If she waits to do so for several years down the line, point back to this letter and deny any further obligation. Ask an attorney to explain "laches" to you.
posted by Old Geezer at 3:34 PM on June 11, 2010 [3 favorites]

Do not ever ask an adversary if you owe them something. They will come up with some debt out of left field that you would never have thought of. Instead, I would suggest a second paragraph that says something like, "Once this loan is paid off, I will consider all financial obligations between the two of us to be settled and resolved."

What you say here is correct and wise, and I defer to it.
posted by davejay at 4:27 PM on June 11, 2010 [1 favorite]

Because you refer to "my debt plan" and it's not totally clear what that is, it's also worth mentioning that if you're on any sort of modified payment plan, it is almost certainly affecting her credit negatively. Most banks, even after a payment plan is arranged, will continue to report the loan as past due.

Other than that, I agree with what everyone else said about her debt-to-credit ratio. Her previous demands--that you pay utility bills and similar--don't sound unreasonable, even if the manner in which she asked wasn't appropriate. This sounds similar, and could be hurting her more than you realize.
posted by MeghanC at 8:21 PM on June 11, 2010

Even if you aren't hurting her financially (and you very well may be), this loan is a legitimate reason for this unpleasant person to get up in your grill. If you have the ability to pay the loan off or refinance it without compromising your own credit and financial security, I can't see any reason not too. Don't give a reason to keep up communications with you.
posted by freshwater at 10:55 PM on June 11, 2010

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