Under a new bill that was recently proposed to the Georgia General Assembly, guarantors will now be notified if a borrower they co-signed for defaults on payments.
House Bill 245 was sponsored by state Rep. Rusty Kidd, of Milledgeville, Georgia. He decided to propose the bill after he saw his credit score tumble, following a defaulted mortgage for which he co-signed.
"It's obviously happening to lots and lots of people, but they might not know it until they check their credit report," Kidd told the Atlanta Constitution-Journal. "If you have a report that says that you defaulted on a loan and you haven’t, you’re not going to get the credit [you need]."
While the bill would provide co-signers with increased notifications in Georgia, it does not prevent the negative credit reporting from occurring first. Moreover, those residing in other states should still regularly check their credit reports to monitor any co-signed loans. Consumers who find themselves with unfair credit report negatives may then seek to repair bad credit as a direct result.
In addition, due to the high number of credit report errors, consumers who co-sign for a mortgage may be at risk for credit harm. As a result, these individuals may benefit from contacting a credit repair company to help them investigate and dispute questionable claims.