Bankruptcy Attorney Las Vegas: What Banks Really See in Your Credit Report

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One of the things that frustrates me most as a bankruptcy attorney las vegas is the amount of weight just about everyone gives to a person’s credit score. Many folks who are considering bankruptcy hesitate because they are afraid of what a bankruptcy will do to their credit report. On top of all that, from what I have observed, a credit score can be a poor way to measure whether someone will be a good credit risk. I have seen many people with high credit scores (over 700) that should not be borrowing any more money, and I have seen many people with lower credit scores (in the 600s) who would be great credit risks but who can’t get a premium loan or interest rate. One of the differences between a decent credit score and a high credit score is whether a person has and uses a credit card or other revolving credit. A person who does not have and use a credit card will usually have a lower credit score than someone who has, and uses, and makes monthly payments on a credit card, even if that credit card is maxed out. Yesterday, I was talking to a friend who works for Citibank in one of their lending departments. During our conversation, I asked him why banks put so much weight on a person’s credit score. The way my friend phrased his answer was really eye opening for me. This friend of mine said that your credit score isn’t meant to tell the bank whether you are a good credit risk only, it is meant to tell the bank if you are the type of person the bank can make money on. In other words, your credit score tells the bank that you will borrow money from the bank and pay it back in a way that will make the bank a lot of money. What is the lesson I take from this conversation? Be careful when you are dealing with a bank. Always ask yourself what motivates the bank in its dealings with you. You can be assured a bank’s first priority is to make ever more money from you. If you have a large amount of debt and the bank is telling you not to file bankruptcy or your credit score will be hurt, remember that your credit score is not meant to help you, it is meant to help the bank first and foremost. Having a high credit score is certainly something that is helpful, but it is not the end all be all of who you are as a person. Changing your life for the better is more important that just keeping a high credit score in the short term. this post

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