By Steve Rhode and Mike Kidwell
Gannett News Service

Question: Recently, I checked my credit report and found that a joint account I had held with a friend is marked as charged off.

Five years ago, she needed a car and couldn't qualify for the loan, so I co-signed for her. I called her after I saw my credit report and found out that she had run into financial trouble and missed payments. Now the loan is completely paid off, but the charge-off is still on her credit report and mine.

Is there anything I can do to get the mark off my credit report?

Answer: Because you co-signed, you were just as responsible as your friend for paying off the debt. So, the mark will stay on your credit report for seven years.

You've learned the biggest danger of co-signing. If the person with whom you co-sign a debt doesn't pay the bill, you might not find out about it until it is too late. Issuers are generally not required to contact the co-signer when a loan falls behind.

Not much to do

Your friend should have notified you when she stopped making the payments. Now that she's hurt both of your credit reports, there's not a lot you can do about it.

Don't bother adding a statement to your credit report to explain, because it will stay on your credit report long after the charge-off expires, unless you remember to remove it.

Also, most loan processing is automated, so the statement would not be factored in to the loan decision.

If you apply for a mortgage, though, be sure to write a letter to the lender explaining the situation and showing proof that the loan is paid off. Mortgage loans are typically approved by hand, so that information could help your chances of approval.

Consumer inquiry

Q: I have about $12,000 in credit card debt, but I have developed a plan that will allow me to reduce it in half in a year, and pay it off in two years. I am hoping this plan will work because I'm planning to buy a house.

I want to check my credit every so often to see how it is improving, but I don't want to hurt it by creating too many inquiries into my credit.

In a previous column, you mentioned that mortgage inquiries sometimes count as a single inquiry. Does that mean I can apply for a mortgage credit check now, three months later and six months later without any problems?

A: You don't need to bother with a mortgage credit check. Ordering your own credit report creates what is called a "consumer inquiry."

These inquiries are not shown to anyone but you and do not negatively affect your credit in any way. Some credit reporting agencies offer "monitoring" services where, for an annual fee, you can check your credit report as often as you like. That might be the way for you to go.

E-mail questions@myvesta.org. Include your phone number.