Your worst credit problems are not as bad as you think

There's a cruel irony to navigating your finances amid the ongoing credit crunch.

On the one hand, maintaining a great credit rating is more important than ever – especially if you're looking for a job or need a loan of any kind. On the other hand, if you mess up royally in the credit department, rest assured that even the worst credit mistakes you can make probably aren't as bad as you fear.

Here's a look at a couple of the most severe credit catastrophes you can face – and why none of them is fatal to your financial life.

Bankruptcy

Bankruptcy is often described as the mother of all credit problems, and for good reason. A bankruptcy filing has very serious ramifications for your credit rating and typically stays on your credit files for 10 years.

But that doesn't mean you're a financial pariah for a decade. In reality, if you go through a Chapter 7 bankruptcy (where most of your consumer debts are wiped out), you'll likely be getting credit card offers and other loan solicitations just six to 12 months after your bankruptcy is discharged.