Is there any logic to all of this?

[down @ out]

I had to file bankruptcy in October 2005. Filed pro-se and was discharged in February and case closed in April. Since then I have kept my nose clean and have little debt and have picked up a few credit cards, Hooters, Jupiter, and HSBC. So far all have been paid monthly in full and really I enjoy the lower limits and knowing there is balance in my life.

What is perplexing is that now my credit scores are back in the 660-680 range and some creditors simply will not extend any credit. In spite of the fact the bankruptcy is behind me and I have no real debt. One would think they would be all over you with offers since you are in financial great shape with more disposable income than you have had in years.

This really became clear in regards to an auto I purchased 6 months before the bankruptcy. I was in a lot of debt but got 2.9% financing on a great car.
Have a freind at the dealership that said even with my situation as good as it is now that I couldn`t get financing for less than 18% Crazy, Crazy world. Maybe buying that car when I did was this best thing I could have done. Looks like now I would be slamed..

Any thoughts?

[tess_bk]

time heals

It's been three years since our BK was discharged. Recently I was only offered credit for 17.7% at one institution and 16.7% at another -- but not because of the BK! It was because I had an outstanding medical bill from the summertime. My husband, who doesn't have any debts outstanding, was offered 12.99% for the older car that we ended up buying. For a newer car, for him, they were willing to go down to 9.99%.

Keep in mind that we have not gotten other revolving credit in the meantime -- I got a Target Visa just to see if I could be approved, but have never used it -- just student loans. Probably, if we had other revolving credit, we would actually have a better credit rating. (I'm at 605 and my husband is something like 645.)

So it does get better with time. I think you're on the right path, paying off your small balances every month and otherwise living within your means.

For me, the hardest part of the car-purchasing situation was settling for an older car that I could get a very small loan on. I really wanted something nice and new, but I settled for something nice and old -- with a good service record -- bought from people I knew personally. It has still been a hard adjustment to make. But it felt much, much better than committing to $250 a month car payments for the next 6 years!

I have the security of knowing that the car will be paid off by the time I get out of grad school (and start paying on those student loans). Once we start making payments on the car loan -- and the payments are going to be extremely modest, just $50 a month for 25 months -- I'm sure our rating will go up.

Also, I should mention that the institution involved is a credit union. They were much more willing to lend at a reasonable rate than other places.

tess

[tinroofrusted]

I had to file bankruptcy in October 2005. Filed pro-se and was discharged in February and case closed in April. Since then I have kept my nose clean and have little debt and have picked up a few credit cards, Hooters, Jupiter, and HSBC. So far all have been paid monthly in full and really I enjoy the lower limits and knowing there is balance in my life.

What is perplexing is that now my credit scores are back in the 660-680 range and some creditors simply will not extend any credit. In spite of the fact the bankruptcy is behind me and I have no real debt. One would think they would be all over you with offers since you are in financial great shape with more disposable income than you have had in years.

This really became clear in regards to an auto I purchased 6 months before the bankruptcy. I was in a lot of debt but got 2.9% financing on a great car.
Have a freind at the dealership that said even with my situation as good as it is now that I couldn`t get financing for less than 18% Crazy, Crazy world. Maybe buying that car when I did was this best thing I could have done. Looks like now I would be slamed..

Any thoughts?

I'm in the same boat you are!

Essentially, my thoughts are simliar, and only differ by this. "If bankruptcy is supposed to be a fresh start, then why don't creditors give you a second chance?"

Theoretically, we are some of the best people to lend to. No matter what, for the next 5-6 years we absolutely cannot file bankruptcy again. These people will get their money from us come hell or high water. Whereas someone who hasn't filed, and gets tired of paying their bills, can go and file tomorrow, and wipe everything out. Or someone who is completely maxed out on all their cards can file, but we CAN'T. There is NO PROTECTION FOR US, and they seem to forget this!

[lrprn]

It's the bankruptcy history itself that creates this situation. Creditors see that at least once you allowed your finances to go past the crisis stage where bk was the only option left. There's little trust you will not do the same thing again. Even though bk may not be an option for 4-7 years, inability to pay is still on the table. Taking you to court to get what owed is time-consuming and can be expensive - better just to deny the credit or slap a huge APR% on it to make sure that they get their money when you do pay.

And yes, Tin, it seems creditors would rather extend credit to someone teetering on the edge of financial ruin who has never filed bk than extend credit to someone who has filed and has proven they are being more financially responsible since filing. It's the creditors' money...they get to do what they want with it. Better for us filers to keep saving and work more on a cash and carry basis for everyday purchases while time takes care of the bk hit. Only 7-10 years of time passing and the bk coming off the credit report ever truly overcomes creditors' prejudices against bk filers. And frankly they don't care one whit whether it's fair to us or not.

[CAB_44]

I'm thinking TIME is of the essence here~
Over a period of time when they see that you are not going to spendthrift again~ maybe it'll get better.........
Just guessing here guys~ I'm still rowin' the boat to the "filing line" .....
just throwing in guesses?!

[CindyLou]

Go to a large volume ford dealership. I got 0.9% on a a new vehicle with 20% down 2 months out of BK. Its all in the shopping for a car loan. I also recently had good luck with Capital One Blank check. 9.9% 100% financing on a new vehicle also for hubby.. Good luck.

[down @ out]

Thanks for the responses.

I guess it is just a strange world we live in.

Have to say if I was a banker a newly bankrupt with a good job and income with no real debt would be a good person to lend money to. Keep in mind that the bankruptcy itself being discharge pretty much proves the person while in something that could not be worked out was more than likely a honorable person.

One other thing why don`t some of these companies simply tell folks with bankruptcies not to apply up front. Seems to me it would save everyone a lot of grief.

[BassBoy]

One other thing why don`t some of these companies simply tell folks with bankruptcies not to apply up front. Seems to me it would save everyone a lot of grief.

You know d&o, that would be nice to know beforehand, but I think that might be getting close to crossing the "Equal Opportunity" lines.

[down @ out]

Good Point. Didn`t think about that.

I just suspected they wanted to mess with us one last time. Nothing like sticking a credit report hit on us and telling us one more time we are worthless.

Thanks,