Debt relief can lead to improved credit access from "summary" of House of Debt by Atif Mian,Amir Sufi
When a household is burdened with excessive debt, it can have a detrimental impact on their ability to access credit. This is because lenders perceive highly indebted individuals as high-risk borrowers, making them less likely to qualify for new loans or credit cards. However, by providing debt relief to these households, their overall debt burden is reduced, which can in turn improve their credit access. Debt relief can take different forms, such as debt forgiveness, debt restructuring, or debt consolidation. Each of these strategies aims to alleviate the financial strain on households, allowing them to better manage their remaining debts and improve their overall financial health. As a result, individuals who receive debt relief are more likely to be viewed as creditworthy by lenders, increasing their chances of obtaining ne...
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