The solution to bad credit can't be more credit -- people will (and do) just take the credit, waste it, and then seek more credit.
A better solution is to allow discharge of private debt so that lenders put more effort into validating debtors. If a creditor want to get money back from a debtor, they need to put the effort in to validate that the debtor has sufficient assets to pay it back and isn't paycheck-to-paycheck buying highly depreciating products.
If you need to buy a house or a car on credit, you can. For almost anything else, you don't need credit unless you have an (usually illiquid) asset to back it -- a slowly-depreciating asset like a house or car, or a steady job.
If you want a loan for a business, the creditor is on the hook for your default. Perhaps they'll insist on keeping your funds under trustee in escrow so you don't waste your loan on a luxury car and WeWork.
And while we're at it, term-limits on secured loans that cannot extend much beyond the depreciation of the loan-enabled purchased.
There's no reason that non-dischargable debt has to be arbitrarily easy to obtain.
No debt besides student loans is truly undischargeable. Historically it seems like it was pretty easy to avoid paying, for better or wose; unfortunately, now judges are more likely to set up unreasonable payment plans and to hold people in contempt for being unable to meet those plans.
That this has not received more attention is troubling -- debtors prisons are illegal, and this is de facto creating a debtors prison. And that is often the only legal test required. That no one who can change the situation cares is indicative of societal rot.
A better solution is to allow discharge of private debt so that lenders put more effort into validating debtors. If a creditor want to get money back from a debtor, they need to put the effort in to validate that the debtor has sufficient assets to pay it back and isn't paycheck-to-paycheck buying highly depreciating products.
If you need to buy a house or a car on credit, you can. For almost anything else, you don't need credit unless you have an (usually illiquid) asset to back it -- a slowly-depreciating asset like a house or car, or a steady job. If you want a loan for a business, the creditor is on the hook for your default. Perhaps they'll insist on keeping your funds under trustee in escrow so you don't waste your loan on a luxury car and WeWork.
And while we're at it, term-limits on secured loans that cannot extend much beyond the depreciation of the loan-enabled purchased.
There's no reason that non-dischargable debt has to be arbitrarily easy to obtain.