Being a cosigner to a lease is it good or bad for my credit

[Pad18]

If she didn't have a lease under her name till now, it could only help her in the long run. As it will show different type of credit.
Yes it will lower in the beginning, as she will have inquiry, but I don't think you need to be concerned about debt to income for the long term, only in the case that you will want/might to take an other loan.

Of course, only if you're 100% sure that your relatives will not miss and of course paid bit off.

[Dovdovmoneytree]

If she didn't have a lease under her name till now, it could only help her in the long run. As it will show different type of credit.
Yes it will lower in the beginning, as she will have inquiry, but I don't think you need to be concerned about debt to income for the long term, only in the case that you will want/might to take an other loan.

Of course, only if you're 100% sure that your relatives will not miss and of course paid bit off.

Thanks! How much better than 745 does she need (I can really get her score higher by paying before the CC statement prints)?? I'm concerned the upside potential should not come back to bite us and end up lowering her score!
She never had a lease on her name. I believe our mortgage used to be joint on her name too (sold, we now rent) but I need to look at her credit report to be sure. It is highly likely we will need to lease/finance a vehicle in the next 12-18 months. I also hope to buy a home in the next 1-2 years.

[Dovdovmoneytree]

Temporarily I mean as long the lease is in effect.
You have to see how much available credit your wife has. And how much the lease/loan will be and if it's more then 10-30% it will definitely affect the score again only temporarily until the lease is paid up.
If your going to take out a lease yourself as well, take that into consideration that you might be paying more for the lease since the score might be lower then usual because of the lease that's already on the credit report affecting the utilization.

When looking at credit as it relates to income; does revolving credit (CC's) count or only fixed loans, which as of now she has none? And I assume you mean all credit, including my CC's on which she is an Authorized User.

Right; that is my concern. I'd rather lend them money than have to pay more on my own finance in 6 months because my/her score was brought down by my kindness 

[ckmk47]

Co-signing the lease will affect your wife's credit utilization - what percentage of her credit she's using.  So the score might be pinged. 
But.   Even with the monthly lease amount, is her utilization below 30% of credit lines?  Then it may not affect it at all.
If it is, you can lower your 'utilization' ratio by paying the cc's a bit before the due date.  Then your  utilization  will appear to be zero on those cards.  ( You may want to leave a minor amount on the card to be paid at the due date, so you have some cc use reported.)

[gozalim]

if the lease is still on the score when you go to apply for the mortgage, wouldn't that, aside from the score, show up as a 'liability/obligation' that the lender would reckon against your income?

[ckmk47]

if the lease is still on the score when you go to apply for the mortgage, wouldn't that, aside from the score, show up as a 'liability/obligation' that the lender would reckon against your income?

a) utilization as part of your credit score
b) utilization as far as what percentage of your monthly income is needed to pay your existing obligations.
So keep your credit cards at close to zero.  (I'm pretty sure that for a mortgage, they want your financial obligations to be below 35% of your  monthly income.)

[gozalim]

a) utilization as part of your credit score
b) utilization as far as what percentage of your monthly income is needed to pay your existing obligations.
So keep your credit cards at close to zero.  (I'm pretty sure that for a mortgage, they want your financial obligations to be below 35% of your  monthly income.)

that^

someone hoping to buy a house should lookout for B when choosing to commit for this lease now. (and factor in the upcoming own lease as well)

[ckmk47]

if the lease is still on the score when you go to apply for the mortgage, wouldn't that, aside from the score, show up as a 'liability/obligation' that the lender would reckon against your income?

yes
But after a certain amount of time, you may be able to be removed as co-signer.
After 2 years of a mortgage, a cosigner can be removed if it can be proved that the mortgage was paid by the borrower. (draft from his account, cancelled checks from his account, etc)

[Dovdovmoneytree]

Co-signing the lease will affect your wife's credit utilization - what percentage of her credit she's using.  So the score might be pinged. 
But.   Even with the monthly lease amount, is her utilization below 30% of credit lines?  Then it may not affect it at all.
If it is, you can lower your 'utilization' ratio by paying the cc's a bit before the due date.  Then your  utilization  will appear to be zero on those cards.  ( You may want to leave a minor amount on the card to be paid at the due date, so you have some cc use reported.)

Thanks and sorry for my delay in response. Yes; I am quite certain her utilization is well below 30%, I believe it is between 5-8% (between the cards on her name and ones she's an AU on). But if I anticipate needing to finance/lease our own vehicle in the next 12-18 months, and possibly looking to buy a home why would I go taking on someone else's lease now?? That is sort of what I am concluding from reading your (and the other) remarks.

[Dovdovmoneytree]

that^

someone hoping to buy a house should lookout for B when choosing to commit for this lease now. (and factor in the upcoming own lease as well)

100%. This is my biggest concern. If I will be looking to take on my own lease/finance within 12-18 months, and possibly purchase a home- why on earth would I consider allowing her to co-sign for a relatives lease, if I have a choice  ? To be honest; I would love to help but I see too much potential for downside in my being a nice guy. Thoughts?

[Dovdovmoneytree]

yes
But after a certain amount of time, you may be able to be removed as co-signer.
After 2 years of a mortgage, a cosigner can be removed if it can be proved that the mortgage was paid by the borrower. (draft from his account, cancelled checks from his account, etc)

Why get into such issues to begin with? I'd like to be of assistance to a relative but only if it has extremely minimal chance of affecting us. I should co-sign thinking that >>hopefully in 2 years, we'll be able to knock off the co-signer? Doesn't seem to make much sense.

[ckmk47]

Why get into such issues to begin with? I'd like to be of assistance to a relative but only if it has extremely minimal chance of affecting us. I should co-sign thinking that >>hopefully in 2 years, we'll be able to knock off the co-signer? Doesn't seem to make much sense.

If you don't don't expect to need the credit for a while, it's a nice way to help a friend/relative get into their house or lease a car.
Since you're only going to do this if you're sure they can make the payments, it's almost certain you can get removed from the loan.

[Dovdovmoneytree]

To summarize from above (as some of this info is new and been awhile since the question was asked); a close relative wants my wife to cosign for a car lease. Wife has 3 CC's with 15k in credit limits (combined) but being AU on my CC's she's at 90k+ in avail credit. Shows 3% utilization (when including my AU accounts). In the next 12 months we likely will need to take out our own lease/finance and hope to buy a home in next 2 yrs. Is it recommended or not recommended for her to cosign? I'm not overly concerned about them not paying but concerned our debt/income (show 115k income) and utilization should not be too high.... Thanks!

[ckmk47]

VERY rough calculation.  (To get a more accurate picture, call a mortgage broker you might use for your house and ask his advice.)
35% of  your income is approximately $3350/ month.  which is approximately the total amount of debt the banks will allow. If the car loan is $350/ month, you have 3K left for mortgage payments.  Which translates into roughly a $600,000 mortgage.  Which, if you put down 20% ($150,000), means a $750,000 house.

[Dovdovmoneytree]

VERY rough calculation.  (To get a more accurate picture, call a mortgage broker you might use for your house and ask his advice.)
35% of  your income is approximately $3350/ month.  which is approximately the total amount of debt the banks will allow. If the car loan is $350/ month, you have 3K left for mortgage payments.  Which translates into roughly a $600,000 mortgage.  Which, if you put down 20% ($150,000), means a $750,000 house.

Thanks! It doesn't seem like you included CC debt. Do you not include revolving debt??

[ckmk47]

Thanks! It doesn't seem like you included CC debt. Do you not include revolving debt??

You're right!
But if you pay most of your cc debt before the bill closes, it likely will report as a negligible amount. I would do this for a month or 2 before you expect to apply for your mortgage.  (Which practically speaking may be the whole year, because you never know when you'll find the house.)

[Dovdovmoneytree]

You're right!
But if you pay most of your cc debt before the bill closes, it likely will report as a negligible amount. I would do this for a month or 2 before you expect to apply for your mortgage.  (Which practically speaking may be the whole year, because you never know when you'll find the house.)

Thanks. I'm thinking that a bank would likely also include taxes and insurance? That can easily add hundreds of dollars monthly.

[ckmk47]

Thanks. I'm thinking that a bank would likely also include taxes and insurance? That can easily add hundreds of dollars monthly.

Interestingly, I haven't noticed that they do, but I may be mistaken.
Basic house costs can easily be $1000/ month.  Taxes $5000-$20,000 annually.  Heating. Increase in electric cost from a small apartment.  Keep that in mind for your budget.