So a friend or even a relative has come to you explaining how they found this great car.  They tell you it has low mileage, ice cold air, runs smooth.  It has new tires, and for a three year old car the price is fantastic.

They go on and on about the car, how it is just what they were looking for.  They ask if you will come take a look at the car, take it for a test drive so you can give them your honest opinion about the great vehicle.

You are flattered that they value your opinion and are glad to take them up on the offer to help.  You look at the car and even agree it is in great shape and the price isn’t bad and mention that with a little bit of negotiating they price would be perfect.

Now that they have you agreeing with them about the car they mention that they have the down payment, and remind you about that new job they just got five months ago so making the payments will be not problem.  They finish that statement with a “but.”  Even though they have the down payment, and can make the payments, they don’t qualify for a loan and they ask if you would be willing to co-sign for them.   They give you every assurance that they can make the payments and that you would have nothing to worry about.  Can you help them out and just “give them a signature?”

Now, lets take a look at this.  They have the down payment, and income from a job of five months that will more than cover the monthly payments.  Why would they need a co-signer?  Simple, contrary to the surface indications that they can afford this car, the bank as proof that this person does not make payments on time or maybe not at all.  The bank considers this person too high a risk to lend them money without the guarantee, in the form of a signature, from someone who has a proven track record of making regular on time payments.  That way, when your friend or relative misses a payment or two, or three (and they will, otherwise they wouldn’t need the co-signer) the bank can and will count on you to cover the loan.

This concept of co-signing isn’t a new one.  For thousands of years people have been guaranteeing the loans of others and are then stuck holding the bag (paying off the loan)

It’s stupid to guarantee  someone’s loan. Proverbs 17:18

So if the concept of co-signing or guaranteeing has been something so bad and common that God felt it necessary to put a warning in the Bible about it, why would any one co-sign a loan for anything? After all, we have been warned it is “stupid.”

So since the Bible is what I consider “Basic Instructions Before Leaving Earth” and more importantly, God’s word, I would never co-sign a loan, regardless of amount, for anyone.

When a bank requires a co-signer they are stating “this person can’t manage money can’t be trusted with this money”

Are you mean, unloving or not a good friend if you don’t “help out” by co-signing? Actually you are just the opposite.  You are a person who is not willing to enable your friend or loved one to continue to mis-manage their money as well as someone who is following Biblical guidance.

You are someone who just may be the person who helps your friend or family member begin a new journey in life. You can take this opportunity to sit with them and help them work a budget teach them how to handle their money so pay for a car on their own without the help of anyone else.

Give a man a fish feed him for a day. Teach a man to fish, feed him for a lifetime.

How do you want to help your friend or loved one?

In yesterday’s blog I mentioned the importance of shredding all credit and loan offers with a cross cut shredder rather than just throwing those offers in the trash. Why is this so important? To protect your identity. For that matter, I go one step further and shred anything that has my name and/or address on it.

Credit and loan offers hold enough information for some unscrupulous person to use in a way that could damage your personal identity if found in the trash or improperly discarded.

Now I am not going to go through the specific details of how this could occur, that wouldn’t be wise as I would be helping out the bad guys. Here we want to protect you from the bad guys.

Now we all know the basics of protecting your identity. Shredding documents that contain personal information. Plus, you should never tell anyone your social security number, credit card number, or even the small little three digit code on the back of your credit card, that you have not determined is a valid representative of the account in question. All account and personal information should be kept as confidential as possible. I don’t tell anyone or even “verify” to anyone that information over the phone unless I have initiated the call myself and know who I am talking to.

So how do you protect your identity beyond that? Well start by opting out of credit offers as we discussed on Friday. Check your credit reports every year, you can do this by going to www.annualcreditreport.com which is a free service. Place a fraud alert at the credit bureaus every 90 days, this will prevent any new accounts from being open and require any new charges from occurring without your prior approval.

Now if you are like me, you probably have other more pressing priorities happening in your life that you are focusing on, such as your family, work, house repairs, car maintenance, etc., so even I will miss a 90 day mark in placing the fraud alerts at the credit bureaus or forget to pull a credit report. What I did instead is sign up for identity protection. I am so pleased with how easy it is, and how I no longer have to worry about it that I placed a link for LifeLock on our main page. Not only will they do all the above, but if after subscribing with them you find yourself in the situation of dealing with identity theft, they will do the leg work for you in clearing it up. This leg work could take hours upon hours of your time, police reports must be filed, letters must be written, all this on top of all your other worries, who has time to deal with that hassle? Not me.

Identity protection is like insurance plus. Not only to they step in after the fact (insurance) but they are also maintaining you on the front end (the plus part), by opting out for you, placing the fraud alerts, etc.

So yes, even though I could do all the leg work that LifeLock does myself, I think it is well worth the small cost to have them do it for me and give me peace of mind and one less thing to worry about.

You know when you go to the mailbox you are going to find at least one of these two things, a bill and/or a new offer for credit. Today I am going to talk about some good reasons why you would want to stop receiving new credit offers.

Now we all know what credit means….that someone is offering you their money for you to use and for this benefit, you will be paying them, the lender, back the original amount of their money, plus some of your own money called interest, which could be 22% or even higher….ouch!

Oh I know these offers can be very tempting by stating 0% interest or no annual fee…..trust me, they wouldn’t be making the offer if they weren’t pretty sure they were going to make a profit from that “0%” that they are tempting you with. Chances are pretty good you will miss a payment, or they will change a due date by a day or two so your payment arrives late, and once that happens…bam, the 0% is gone and the 22% is your new interest rate because you failed to meet their nearly impossible terms for the 0% rate.

If you think these offers are coming more often now than in the past, you would be correct. Consumer Credit Counseling Services says that “financial institutions are soliciting people who have good credit right now” more than ever, why, because they need the money, and people with good credit are their best best, they figure you will pay, but still make a mistake not to meet the original terms of the deal.

Yes, it is flattering to think that you are considered to be an individual with good credit by receiving these offers, but don’t buy into it. You want to keep that good credit, not by getting more credit cards, or additional loans and building more debt, but by doing just the opposite. Paying with cash. Yes, you heard me, if you have to buy something on credit, or with a loan (besides a house) that means you are admitting, “I can’t afford this, so I am going to have someone else front me the money” and then inside you tell yourself, “oh I can pay this off with my next bonus check” which you have already allocated to last weeks credit purchase that you forgot about. The cycle continues until one day you have more debt than you have income.

The first thing to do when you receive an offer for new credit is to shred it, with a cross cut shredder. Don’t just throw the offer away in the trash…that is the worst thing you could do (well besides filling it out and applying for the credit) Shred it so no one else could gain access to it and take your identity, but that is another topic we will talk about that in Monday’s blog.

The second most important thing you want to do is opt out of all these credit/loan offers. Remember, your goal in life is to pay cash and live debt free, so there is no reason to apply for credit as that will only make you poor and someone else rich with your money.

To opt out of these offer go to https://www.optoutprescreen.com or call 1–888-567-8688. Make sure you choose the option to opt out for life. Credit is not your friend when it comes to wealth building….Cash is.