Why do people think they need to establish credit right after bankruptcy?

[ironpirate]

Credit is what got most of us in this mess. Don't say you learned your lesson because we all know what will happen down the road. Listen to Dave Ramsey.

http://daveramsey.com/d/6005

[tyson24]

I will never have another credit card. Not even to better my credit. Credit is what got me here. Lesson learned after 2 BK's. First one was stupidity and second was circumstances-that would maybe not have mattered if we weren't charging so much. Debt free is the way I want to be. I will never get there if I continue to bury myself in money I do not have.

I do however, not chastise people for wanting their credit better again. The only way you can do that is credit it seems.

[ironpirate]

Exactly, I will never have a credit card again either. I think people need to build up their wealth first before they even think about getting credit.

[tyson24]

Yes that is true. Only charge what you can pay off in a month...and even if you have a huge mishap. You should have money saved for that too before getting a credit card.

[despritfreya]

Consumers want to rebuild credit because they are brainwashed. The credit industry pushes credit upon us. The more credit worthy we are, supposedly the better rates we can get. What a bunch of crap. Every time I see/read a post about someone wanting to "reestablish" credit I cringe. Why, so you can run up credit cards again. . . so you can finance that boat you really don't need or can afford. . . so you can get yourself into that more expensive auto????

The reality is a higher credit score only really matters when you make a big purchase such as an auto or home as it relates to how much interest you are going to be charged. Once you have a home and, since most folks keep their autos for a number of years, the credit score DOES NOT mean a hill of beans. Now I realize some will argue claiming a better score helps in other ways such as cost of insurance. Garbage. A smart consumer will shop the market and find the best rate regardless of such an issue. And. . .

My personal experience (having nothing to do with what I do for a living as my family and I have always lived our lives like this). . . I pay my credit card (notice I did not say "cards") off every month. I never buy a car unless I can pay cash (that means I keep my autos until they are about to drop dead and between purchases I “save, save, save”). I don't buy "toys" unless it is with cash. And. . .the only thing I owe $$ on is my house (my mortgage payment is less than most rentals in my area). I have no clue what my "score" is nor do I care. If more folks would take the "who cares" attitude there would be a lot less financial disappointments. But alas. . . consumers will be consumers and will continue buy into the notion that having a good credit score (what ever that means) is a necessity of life. And, as sad as it seems, that attitude will help me stay in business because, inevitably, the more credit consumers have the more then spend and the more likely they end up in financial ruin.

Des.

[df04527]

AMEN Des!!

[MeLLE159]

Hey Des I totally understand your points here about not establishing credit right away, but if someone wants to buy a house there going to have to rebuild there credit which means obtaining some form of credit. Also I live in MI and were a nofault state for auto ins and your insurance makes a heck of a difference. Also when you have a home you need Ins and I work for one and we use your ins score in determing premiums. And if your score is marginal your surcharged an amount for that. So all I'm saying is that score matters for more than just buying a house.

Consumers want to rebuild credit because they are brainwashed. The credit industry pushes credit upon us. The more credit worthy we are, supposedly the better rates we can get. What a bunch of crap. Every time I see/read a post about someone wanting to "reestablish" credit I cringe. Why, so you can run up credit cards again. . . so you can finance that boat you really don't need or can afford. . . so you can get yourself into that more expensive auto????

The reality is a higher credit score only really matters when you make a big purchase such as an auto or home as it relates to how much interest you are going to be charged. Once you have a home and, since most folks keep their autos for a number of years, the credit score DOES NOT mean a hill of beans. Now I realize some will argue claiming a better score helps in other ways such as cost of insurance. Garbage. A smart consumer will shop the market and find the best rate regardless of such an issue. And. . .

My personal experience (having nothing to do with what I do for a living as my family and I have always lived our lives like this). . . I pay my credit card (notice I did not say "cards") off every month. I never buy a car unless I can pay cash (that means I keep my autos until they are about to drop dead and between purchases I “save, save, save”). I don't buy "toys" unless it is with cash. And. . .the only thing I owe $$ on is my house (my mortgage payment is less than most rentals in my area). I have no clue what my "score" is nor do I care. If more folks would take the "who cares" attitude there would be a lot less financial disappointments. But alas. . . consumers will be consumers and will continue buy into the notion that having a good credit score (what ever that means) is a necessity of life. And, as sad as it seems, that attitude will help me stay in business because, inevitably, the more credit consumers have the more then spend and the more likely they end up in financial ruin.

Des.

[dspii]

The reality is a higher credit score only really matters when you make a big purchase such as an auto or home as it relates to how much interest you are going to be charged. Once you have a home and, since most folks keep their autos for a number of years, the credit score DOES NOT mean a hill of beans. Now I realize some will argue claiming a better score helps in other ways such as cost of insurance. Garbage. A smart consumer will shop the market and find the best rate regardless of such an issue. And. . .

Your credit score will not be engraved on your headstone as a life-long accomplishment...at least I hope not. The credit reporting agencies are profit generating businesses and it is in their best interest, by way of high profits, to keep the public scared and instilling the dreaded credit check into every facet of our lives. I am currently interviewing for better jobs....guess what, I am not worried about the interview...easy - smeasy, I am more worried about the BK and the public perception of it.

Now, for so many people stuck in the rust belt and other parts of the country, with more and more jobs being lost, moving is becoming a fact of life. Most can qualify for a new mortgage 2 years after dischage, but you must demonstrate good payment habits, by way of a credit score. Paying your mortgage and your credit card will keep your scores up there, but as you said.....who cares. There will always exist the need for credit....but responsible usage is the lessons we all learned. As long as the bureau's are generating a profit, it's likely that we'll find their intrusion into our daily lives even more so.

[HOMEBODY]

I have just been discharged and I am looking to reestablish my credit..First because I have a business and have to have a bond and they check my credit upon renewing. It it renewed every 2 years...This year I was lucky they didnt check my credit scores when I renewed in May. It will come to renewal in 2 years and I want to start right now to reestablish credit. I already had a car loan that I reaffirm so thats good, but I think I need another card or so to get my credit back. I also wanted because unfortunately it is necessary to have good credit for insurance purposes, rental (if I need to rent another business location) and eventually in 2 years I would like to buy a little condo for my old age if the prices are still low. I have a house now that I owe $730,000 and a rental but I did not reaffirm those, so I guess they wont count.

[backtoschool]

Lifestyle choices, such as whether we take on a mortgage or a car, are just that choices. I want to buy a house and wanted to upgrade my car. That is my choice, and I am living responsibly and am willing to take on the consequences of my choice. For those who are preaching about credit choices without even being through their discharge yet, well my advice would be to wait and see what the future brings. Get through your bankruptcy before you advise others on how to spend their money post bk.

I could go to other credit boards to post my successes, regarding credit etc and I do. Just as anyone who is a fan of Dave Ramsey can go to a Dave Ramsey board and worship him. I post to this thread so that I can share my post-bk credit rebuilding experiences with those that also have similar goals to mine and can benefit from the info I share.

[tanya0525]

Lifestyle choices, such as whether we take on a mortgage or a car, are just that choices. I want to buy a house and wanted to upgrade my car. That is my choice, and I am living responsibly and am willing to take on the consequences of my choice. For those who are preaching about credit choices without even being through their discharge yet, well my advice would be to wait and see what the future brings. Get through your bankruptcy before you advise others on how to spend their money post bk.

I could go to other credit boards to post my successes, regarding credit etc and I do. Just as anyone who is a fan of Dave Ramsey can go to a Dave Ramsey board and worship him. I post to this thread so that I can share my post-bk credit rebuilding experiences with those that also have similar goals to mine and can benefit from the info I share.

Nicely said

[MeLLE159]

Finally a reasonable person! Well put!

Lifestyle choices, such as whether we take on a mortgage or a car, are just that choices. I want to buy a house and wanted to upgrade my car. That is my choice, and I am living responsibly and am willing to take on the consequences of my choice. For those who are preaching about credit choices without even being through their discharge yet, well my advice would be to wait and see what the future brings. Get through your bankruptcy before you advise others on how to spend their money post bk.

I could go to other credit boards to post my successes, regarding credit etc and I do. Just as anyone who is a fan of Dave Ramsey can go to a Dave Ramsey board and worship him. I post to this thread so that I can share my post-bk credit rebuilding experiences with those that also have similar goals to mine and can benefit from the info I share.

[tobee43]

except one thing....like this state for car insurance it is BASED ON YOUR CREDIT rating...

and until congress passes reform that changes the fact a person gets charged either a higher or lower rate simply because they have good or bad credit....we'll need credit. like it or not.

backtoschool is correct as usual....however in this case we have NO choice!!

as much as i don't ever want a cc's again!!

[ironpirate]

Lifestyle choices, such as whether we take on a mortgage or a car, are just that choices. I want to buy a house and wanted to upgrade my car. That is my choice, and I am living responsibly and am willing to take on the consequences of my choice. For those who are preaching about credit choices without even being through their discharge yet, well my advice would be to wait and see what the future brings. Get through your bankruptcy before you advise others on how to spend their money post bk.

I could go to other credit boards to post my successes, regarding credit etc and I do. Just as anyone who is a fan of Dave Ramsey can go to a Dave Ramsey board and worship him. I post to this thread so that I can share my post-bk credit rebuilding experiences with those that also have similar goals to mine and can benefit from the info I share.

It's not hard to advise people not to get credit cards and go into more debt, that should be obvious. I'm not talking about getting a house or maybe a car. I'm talking about people getting and opening credit cards that will not help you in rebuilding your credit. What sense does it make to say I have to have credit cards to get good credit? Most people will have a house loan or car loan coming out of BK. Thats all the credit you need and then you work to get them paid off and be debt free. You can't buy a house for 2 years after BK anyway. I know its hard for people to live without credit cards but its time for a change. But it makes no sense into getting into debt when you have no savings saved up. I know everyone wants new cars and swag to act like they have money but when you retire at 65 and only have a soc sec check to live off and you look back and see what debt did for you.

[backtoschool]

It's not hard to advise people not to get credit cards and go into more debt, that should be obvious. I'm not talking about getting a house or maybe a car. I'm talking about people getting and opening credit cards that will not help you in rebuilding your credit. What sense does it make to say I have to have credit cards to get good credit? Most people will have a house loan or car loan coming out of BK. Thats all the credit you need and then you work to get them paid off and be debt free. You can't buy a house for 2 years after BK anyway. I know its hard for people to live without credit cards but its time for a change. But it makes no sense into getting into debt when you have no savings saved up. I know everyone wants new cars and swag to act like they have money but when you retire at 65 and only have a soc sec check to live off and you look back and see what debt did for you.

What is obvious to you ironpirate may not be obvious to anyone else on this thread. Nobody on this thread is talking about getting into more credit card debt. The cards are paid in full by most of us. (at least by me anyway). If you do not have a foreclosure on your record, you can get an FHA mortgage in two years post bk. That is what many of us are working towards.

I understand your point, but there are always two sides to every story. Most of us have learned our lessons post bk and are trying to rebuild our lives. If you are afraid of getting credit post bk, that is perfectly understandable. Don't get any credit. But your goals and life circumstances might be different than those of other people. All of us need to research the facts, and then do what makes sense in each of our individual circumstances. Getting credit or not getting credit post bk is a choice, and both choices are valid choices.