The New York Times is reporting that lenders are starting to loan money to people who are “high risk.” This means two things. First, if you have bad credit (and if you’re thinking about bankruptcy, I assume that’s the case), you’ll be able to find lenders who will loan you money to help you rebuild your credit. Second, these lenders are going to slam you with outrageous interest rates and annual fees.
Without a doubt, the number one question people ask me during their initial consultation is, “what will bankruptcy do to my credit?” There’s no nice way to put it: a bankruptcy does not look good on your credit report. What I try to get them to understand, though, is that bankruptcy is just a detour to good credit and a better financial life. They will be able to rebuild their life through careful choices.
And making the right choices is what this article made me think of. It isn’t necessary to go out and try to get credit as soon as your bankruptcy is discharged. Try to focus on better spending habits and saving money. Remember what it was like to have the pressure of overwhelming debt.
You can read the article here.