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Why would someone with a good credit score file for bankruptcy?

A person's credit score affects his or her ability to get a loan, obtain good interest rates and more. Not only do lenders view borrowers with good scores more favorably, they are also more likely to give those consumers access to more diverse credit offers. A record number of Americans now have good or excellent credit scores, so it might feel counterintuitive to think of this group being at risk for bankruptcy. That risk is unfortunately very real.

A good credit score is considered to be 700 or more, while an excellent score starts at 800. Nearly 60% of Americans have credit scores that fall into one of these ranges, a fairly significant improvement from just a decade ago. Since 2010, borrowers in Connecticut and across the country have been making increasingly fewer late payments. Delinquency rates also fell over that same period of time. Delinquencies and late payments negatively affect credit scores, so it is easy to see why scores have gone up.

But credit scores do not paint a full picture of people's finances. A lot of people in Connecticut might be in better financial situations but are still struggling to pay off debt. Around 66% of people with credit card debt owe just as much -- and sometimes more -- than they did 10 years ago. Keeping up with rapidly increasing consumer debt might be possible for those who have better incomes and financial security; however, they might still be just barely getting by.

Having a good credit score does not mean that a person has his or her debt under control. Making minimum payments is usually not enough to stop interest rates from growing balances out of control. Borrowers who are only just managing to get by should not wait until they are falling behind on payments to think about bankruptcy. Acknowledging when debt is out of control can be the first step to owning one's situation and getting started on the process to discharge debt.

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