A study conducted by LendingTree, the nation’s leading online loan marketplace recently determined while a prior bankruptcy filing makes it more expensive to borrow, it is not impossible to qualify for credit.
The study references if borrowers wait to apply for new loans a few years after bankruptcy, they may find rates not too far off from what other borrowers are being offered.
Investigators said the work involved reviewing loan terms offered to over a million anonymized LendingTree users in 2017, as the groups were split into those who declared bankruptcy within the last seven years and those who had not.
A comparison was then conducted based on the types of loan offers both groups received, as a means of determining who got the better deals.
The findings showed people recovering from a bankruptcy are in a similar position to anyone who needs to repair their credit standings. There was no indication that people in the aftermath of a bankruptcy will have a harder time accessing credit than their peers who did not file for bankruptcy.
“People may think that filing a bankruptcy would put you out of the loan market for seven to ten years, but this study shows that it is possible to rebuild your credit to a good credit quality,” Raj Patel, LendingTree’s director of credit restoration and debt-related services and products, said.