Whats the best way to repair a credit rating?

I co signed for an auto loan for my sister, now she tells me she cannot pay,(only been 6 months) and my situation has changed and I can't pay ... whats gonna happen to my credit rating?? Is there any way to get the payments low

• Answer:

  They will come after your sister, and then after you, and both her credit rating and yours will be negatively impacted. You should try to solve the issue together. One possibility is to refinance the car loan (a longer period will mean lower payments). Most lending institutions will be willing to do this rather than letting the debt go into a long default. Another possibility is to get a lower interest and/or longer loan elsewhere, to get lower monthly payments, and pay the loan with that. Do you or your sister own a property? Another possibility is to get an equity loan on your property, pay the car loan with that, and have your sister help you pay the equity loan, or refinance your mortgage and have her help you pay the difference, which in any case should be substantially less than the car loan payments. Now it's also time to think about how critical it is for her to keep the car. I'm assuming it is, otherwise selling the car is yet another possibility.