I'm the bad guy in my family. And. I. Don't. Care. I love my family members. I wish the best for them. I'm always rooting for them. But I am not going to risk my credit life for them. I don't care if you think I'm greedy and uncaring. My credit is my credit. Your credit is yours. Deal with it.
Now you can see why everyone is so fond of me (rolls eyes). We all have to make tough choices in life. When it comes to finances -- especially with family and friends -- the tough choice must be made. When it comes to cash (as opposed to credit), I'm a bit softer in my stance. Indeed, although I hate lending money to people, I'm not against making a gift. A gift means that I won't have to chase someone around so that I can get paid. Plus, giving money away means that I'll never have to worry about ruining a perfectly good relationship because of money.
When it comes to my credit history, though, that's a different story. I am as rigid as all get out. I can't compromise here. That's my rule and I am sticking to it. I will not be a co-signer on an auto loan. I will not be a joint cardholder on a credit card. I will not put your electricity bill in my name. I won't get a cell-phone account in my name so that you have a cell phone to use. I will not get on your lease so that you have a place to live. In short, I am not your credit life line. Period.
I feel sorry for those who struggle with this issue, though. At our core, we all want to help people out. We want to help our family and friends even more. But when it comes to your personal credit reputation (and that's what your credit history is), you have to stand firm. Why in the world would a deadbeat who doesn't care about his or her own credit, ever care about yours? There is a reason every creditor has denied this person. They're not a good credit risk. Can you imagine this person caring about your credit? Fuggedaboutit. Oh, they'll tell you that you can trust them and that they'll never miss a payment. But desperate people do and say desperate things. I don't want to hear the rap. I've heard it all before.
These desperate people come to you because of your stellar credit habits. They come to you because they know you could get approved for whatever it is they cannot. But you didn't get to where you are by being stupid. And stupid is what you'd be if you decided to put your credit history on the line for someone who has shown a history of not giving a damn about credit. In the end, you'll either end up with a credit blemish or you'll end up footing the bill. It happens that way almost every time. Take it to the bank.
I recently loaned a couple hundred bucks to my nephew. He was in a real bind. He needed the money -- post haste (don't they always?). He made every promise in the book. He'll pay me back on Tuesday. He won't let me down. Guess what? Tuesday came and went. He called at the end of the week to let me know that he would pay me back during the following week. What happened to Tuesday? Something came up. Don't worry. I'll have the money soon, he said. This was in June. It's now September. I still haven't been paid back. I haven't heard from him in six weeks.
But here's what he didn't know: I was going to let him keep the money. If he had tried to pay me back on that first Tuesday I would have declined the payment and told him to consider it a gift. I made him think it was a loan so that I could learn something about him. Would he turn out to be a great credit risk? Or would he turn out to be a desperate person who would say anything to get the money that he so desperately needed? Now I know.
Meanwhile, some of you are thinking about hitting the "comment" button because I've ignored the other group of people who need credit help. These people aren't deadbeats -- they're people who don't have any credit at all; they're people who might be starting out. My answer is the same: don't put your credit reputation on the line. It's not worth it.
My position may not win any points with my family and friends, but that's OK. I'm still there for them in everything else. I'm reminded of "Rounders," the Matt Damon movie, when it comes to people taking advantage of my credit. There's a scene in the movie where Matt Damon's character is trying to borrow some money from a friend. Damon's character is desperate for cash. He owes big money to a bad man -- and the debt is due in one day. The quote: "You want me to call some people, try and buy you some time, I will. Place to stay, or the truck. No problem. But about the money, I gotta do this. I gotta say no."
And that's exactly what you have to do with your credit. Do what you can to help your friend or family member out. But when it comes to putting your credit history on the line, you've gotta do it.
You've gotta say no.