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Voluntary Surrender Could Harm Credit Scores

Dear Experian,

I recently co-signed for someone, and our relationship ended. They gave me the truck back and said they no longer wanted it. I have a car payment myself, so it will be hard to have two payments. I also am trying to save money to buy a house within next year. I have thought about voluntarily surrendering the vehicle. My credit has just recently improved. If I decided to do this would it ruin my credit to the point where I wouldn’t be able to get approved for a mortgage?


Dear CZC,

A voluntary surrender is viewed negatively by most lenders, and would most likely have a substantially negative impact on your credit scores. If you are planning to buy a house in the next year, having a voluntary surrender added to your credit reports could certainly make doing so more expensive and more difficult, if not impossible.

When you cosign for a loan, you are taking legal responsibility to pay the debt if the other person does not. Cosigning for someone always carries the risk of the other party defaulting on the loan and leaving you stuck with the bill.

Depending on the resale value of the truck and the amount still owed on the loan, you might be able to sell the truck and use the proceeds to put towards the balance still owed on the loan. Then, you could focus on making payments on the remaining balance. You might even be able to refinance the remaining amount for a much smaller monthly payment.

Unfortunately, you’ve learned the hard way that cosigning is a very serious decision that may continue to have consequences long after your relationship ends.

Thanks for asking.
The “Ask Experian” team

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