Mortgage loans won’t appear on cosigner’s credit report after cosignee bankruptcy
The “Ask Experian” team, following up on a user question, indicates that the bankruptcy could be indicated on two parts of the cosigner’s record.
For Minnesota residents who are having trouble gaining approval for a new mortgage, nothing can be more helpful than the backing of a cosigner. With the assistance of an individual with a prime credit score and years of proper payment habits, borrowers in Carver County, Washington County and St. Paul can secure more affordable interest rates and even loan approvals they may have otherwise been denied.
However, in the event that this individual needs to file for Chapter 7 or Chapter 13 bankruptcy, cosigners may begin to worry about how this development will affect their crucial three-digit credit rating. According to Experian though, one of the three major credit bureaus in the United States, bankruptcies won't affect a cosigner's credit report negatively.
The “Ask Experian” team, following up on a user question, indicates that the bankruptcy could be indicated on two parts of the cosigner's record. First, the court filing will be available through public records, as the cosigner's name would be indicated on the loan.
The second place this information will be available is on the credit report itself. But, unlike the borrower, who will likely see an immediate drop in creditworthiness for having a bankruptcy on their credit report, the cosigner will simply have the account listed on their report as being in bankruptcy. For example, while loans that are being paid on time will display a “current” status, accounts in bankruptcy will display the phrase “account included in bankruptcy.”
Still, mistakes can and do happen to even the best borrowers. As such, both the borrower and the cosigner should vigilantly monitor their credit reports during a bankruptcy. For the best advice on how to navigate this potentially lengthy but beneficial process, contact the representatives at The Atlas Law Firm for Minnesota bankruptcy information and foreclosure advice. Our experts can you determine if a filing is right for you or your cosigner given your current fiscal status.