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LRC Credit Edition - Day 18: Relationships and Credit

LRC Credit Edition - Day 18: Relationships and Credit

By TheBudgetnista -  Tags: ,


New to the Live Richer Challenge: Credit Edition? Learn more about it HERE.

Need to catch up? Head here and then come back!

Day 12: 100 Points

Day 13: Review, Reflect, Relax

Day 14: Weekly Inspiration

Day 15: Hard vs. Soft Inquiry

Day 16: Your Credit Mix

Day 17: Lower Interest Rates

Week 3: Credit Maintenance

Day 18: Relationships and Credit

Today’s Easy Financial Task: Learn how to respond to family and friends who want you to co-sign for their loan or who take advantage of your credit.

How to rock this task:

  • Respond to family and friends who ask to use your credit for their gain
  • Remove yourself as a cosigner from someone else’s loan
  • Remove authorized users from your credit card accounts

We’re back!

There are just a few more days left in this Challenge, but many more tasks to cover, so roll up your sleeves, Dream Catcher!

This week our mission is establishing a game plan for long-term credit maintenance. We can’t cover this topic without getting serious about how relationships can impact our credit.

Let’s just be real here: When you experience financial abundance whether it’s career growth, wealth, or a good credit score, people around you notice, and some will ask for favors.

There’s nothing wrong with sharing wealth or abundance. In fact, giving back activates abundance in your life. However, when your credit is at stake, you need to make sure these favors won’t be detrimental to your family’s financial future.

Be cautious of co-signing or giving someone access to your credit.

Here’s why:

If you cosign on a loan or credit card for someone who doesn’t pay, the history will appear on your credit report and, even worse, you’re also on the hook for the debt.

A family member or friend who asks you to cosign for them may appear to have a stable source of income and intentions to pay up, but there’s no way to know for certain what the future holds. Things happen (i.e. medical emergencies or job loss) that can impact their ability to pay.

Furthermore, when you give someone free reign to use your credit cards, you’re the one responsible for repaying that debt on time. The child, partner, relative, or friend, is not facing the repercussions of the unpaid debt on your credit history.

Having conversations with loved ones about favors that involve cosigning or access to your credit lines is challenging. No one wants to be that sister, cousin, mom, or aunt who’s tight with purse strings.

However, in this instance, it’s your right to say “no.”

Since it’s a tough conversation to have, here are angles to approach the situation and scripts you can use. Just fill in the name of who you’re talking to in the blanks.

If someone asks you to cosign on their student loan, mortgage, personal loan, auto loan, credit card, etc.:

Approach #1: I want to support you, but I also need to hear your plan first.

“___________ (their name), I admire your ambition and desire to go to school. How much will you need in a loan? What are you studying and what is the career/salary growth within that field? What is your plan for paying it back? For me even to consider co-signing _______ (son/daughter), I need to feel confident in your career plans.

Approach #2: I’m in the process of building credit and can’t help at this time.

“Sorry, _________(their name), I’m working on my credit to buy my own __________ (house, car, boat, etc.) and cosigning is another responsibility that doesn’t fit into the plan right now.”

Approach #3: I don’t mix money and relationships.

“Sorry, __________ (their name), I have a rule that I never cosign for anyone. It’s nothing personal; I just like to keep my relationships and finances separate. Money disputes can be real relationship killers.”

Approach #4: Straightforward

“Sorry, __________ (their name), cosigning makes me also financially responsible for the loan. If something should happen and you can’t make payments, I would have to take ownership of the debt. I don’t feel comfortable assuming this responsibility.”

If someone asks to use your credit card:

Approach #1: Cut to the chase.

“Sorry,___________(their name), I currently don’t have the funds.”

Approach #2: I have other financial goals.

“Sorry,____________(their name), I’m working on aggressively repaying my current debt. I want to be debt free by ______, so I can’t let you use my credit card.”

Approach #3: I’m using cash only right now.

“Sorry,________(their name), I’m on a cash only spending kick, so I can’t give you my credit card for _________.”

What if you’ve already said yes to a favor?

Hindsight is always 20/20, right?

You may be regretting that you agreed to cosign on a loan or that you currently allow a child, partner, or relative to paint the town with your credit card.

There are some ways to get out of it:

Sell or pay off the loan - If the borrower can’t keep up with the loan payment, it may be time for them to cut their losses and sell the car or whatever asset it is they can no longer make payments on.

Although it’s not the best (or most affordable) scenario, you could also bite the bullet and pay the loan off yourself to stop the borrower’s poor payment history from damaging your credit.

Apply for cosigner release - Cosigner release can be an option if the loan you’re a cosigner on is in good standing. Once a certain amount of consecutive, on-time payments are made on a loan, the borrower may qualify to have you removed from the contract.

Cosigner release may be available for both federal and private student loans. Reach out to your loan servicer for details.

Refinance the loan - A loan refinance is when you take out a new loan with better terms to repay another loan. Having the borrower apply for a refinance on their own is another way to get your name off of the contract.

Remove authorized users from your cards - If someone you added as an authorized user on your credit card account is overstepping boundaries, you can cut them off by contacting your credit card company to have them removed.

If someone you know is using your credit card without asking, you can also file a dispute on their charges and request a new card. Many credit cards have a zero liability policy which means you aren’t held responsible for unauthorized charges when your card is lost or stolen. Check with your credit card issuer for details.


If you’re stuck co-signing on someone else’s loan or someone is abusing your credit, don’t be too hard on yourself. Consider it a lesson learned and avoid cosigning or being lax with your credit cards in the future.

Navigating relationships, money, and credit is never easy. So, reach out to your fellow Dream Catchers participating in the Challenge if you need another perspective on how to address your situation.

You can also leave a comment in the section below and reach out to your accountability partner(s).

Share what you’ve learned today with your tweeps:

Today I learned how to remove myself as a cosigner on a loan! Day 18: #Liverichercredit Click To Tweet

Live richer,


You can reach out to me here:

Twitter: @thebudgetnista

Instagram: @thebudgetnista

Facebook: The Budgetnista

Private Forum: Dream Catchers : LIVE RICHER

P.S. Don’t forget to get your free Live Richer Challenge: Credit Edition Starter Kit. Get it HERE.

P.P.S. Here’s a copy of the Challenge Calendar. It’s a fun way to keep track of your progress.

*** Need Help? Feeling Overwhelmed? Want to work with someone one-on-one to improve your credit? Netiva "The Frugal CrediTnista" is offering her renowned, full credit improvement services & consultations at a special discounted price just for Dream Catchers! And there's also a FREE Live Richer Credit Repair Toolkit with your name on it! Learn more and get the help you need, HERE. ***

Want to work through the Live Richer Challenge: Credit Edition in a workbook? It's part of a bestselling series and has already hit #1 on Amazon! Get your copy below.


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Tiffany “The Budgetnista” Aliche is quickly becoming America's favorite, personal financial educator. The Budgetnista is also an Amazon #1 best selling author (The One Week Budget and Live Richer Challenge), sought-after speaker and teacher of financial empowerment.
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