This is a guest post from Jeff Rose, CFP who blogs at GoodFinancialcents.com. Jeff is well known among bloggers for his various causes: The Debt Movement, The Roth IRA Movement and The Life Insurance Movement.  His first book, Soldier of Finance, officially releases September 9, 2013.

“Heck no!”

Imagine if a stranger asked you one of the following questions:

  • Can I borrow your credit card to make a quick purchase? I don’t have any cash on me.
  • Mind if I take your car for a quick trip to the grocery store. I don’t feel like waiting for the bus.
  • Do you mind co-signing with me on the new house I want to buy? My credit isn’t the greatest.

My hope is that if a stranger asked you any of these, your response would be an emphatic, “Heck no!

Flip the script

Okay, now let’s change the situation a bit. Instead of a stranger asking you the questions above, what if it was someone you knew? And not just anyone, someone close. Very close. What would you say then?

It might be easier to turn down a friend, but what if was a relative? What if it was a parent? Then what would you say? Could you say “Heck no!”? Could you at least muster a simple “no”?

Saying “no” to a parent can be much more difficult. It can feel impossible. I know it did for me.

It’s just a signature

When I started my career, my future was bright. Good job, good credit; things were progressing as planned. My mom’s financial situation at the time, however, was a bit different.

My mom had good amount of cash from selling at the height of the Los Angeles real estate market in 2004 and used those proceeds to pay cash for her new home in the significantly cheaper Las Vegas market. Timing wise, she couldn’t have chose a better time.

She could have sit back and enjoyed her retirement years with the excess cash. Instead she wanted in on the real estate boom that was taking over Las Vegas.

Unfortunately, there was one small hitch preventing her from doing so: bad credit. A bankruptcy filing years back had ruined my mom’s credit, and that made getting approved for any loans impossible.

She needed someone to help her out.

She needed someone with good credit to co-sign with her.

She needed her son.

“Do you mind co-signing with me on the new house I want to buy? My credit isn’t the greatest.”

What would you say if it was your mom asking you this question? Could you say no? Here’s how it all played out:

This article is about Choices, Credit scores