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Georgia bill would alert guarantors of defaults

Mar 03, 2011 Brian Bradley

A bill making its way through the Georgia state legislature would establish necessary reporting to all guarantors of loans should the primary borrower go into default, the Atlanta Journal-Constitution reports. Under the proposed bill, lenders will be forced to notify the guarantor in a move to not only protect his or her credit, but to protect the lender as well. State Representative Rusty Kidd, who sponsored the bill, believes such measures are important to protect the credit of guarantors, as they may not find out about the default and the negative mark on one's credit score until it is too late. "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 paper. "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]." Currently, the bill does not dictate any penalties that could be levied, but Kidd believes the measure is important to protecting consumer credit scores, even if lenders are already in the habit of notifying guarantors of defaulted loans.