<p>We were recently denied for a Parent PLUS loan (under my dad’s name) because of a bankruptcy which was discharged 4 years ago and a recent repossession. The bankruptcy was under both my parents’ name and the repossession was under only my dad’s name. We have not applied for the loan under my mom’s name. </p>
<p>So I have two questions:</p>
<ol>
<li><p>Should we apply for the PLUS loan under my mom’s name? (Pretty good credit since the bankruptcy, which was discharged a little over 4 years ago)</p></li>
<li><p>My grandma is willing to co-sign for the loan. However, she has absolutely NO credit history whatsoever (not bad credit/history, but NO credit/history). Like, she literally has never used/needed her credit. I don’t even think its ever been ran. So, does anyone think she will get approved as the co-signer if she has NO credit history?</p></li>
</ol>
<p>No credit is worse than bad credit in most cases.</p>
<p>If you grandmother isn’t working, which I expect is the situation, she will not be approved for credit. Credit is granted almost entirely based upon ability to repay the loan and experience showing that such repayments have been made in the past. Without any income, the ability to repay doesn’t exist (and if she has the cash in the bank, and wants to co-sign, they will wonder why she doesn’t loan you the money directly).</p>
<p>Based upon this, and your mother’s re-established credit history, you should have your mother apply for the PLUS loan. Besides, the PLUS loans are designed to be taken out by parents, not grandparents anyway.</p>
<p>Good luck.</p>
<p>Thanks for the thorough explanation, Calcruzer.</p>
<p>I guess we will try applying under my mom’s name. In the meantime, we will also look for another co-signer. Hopefully, though, my mom will be approved.</p>