Does a good credit score matter with chapter 7 BK (paying, taxes, accounts)

[UntilTheNDofTimE]

Long story short, my GF filed chapter 7 prior to our relationship. After some time had passed I convinced her to open a secured credit card and take out a secured loan from her credit union to rebuild her credit. I thought this would be a long battle back to having a decent credit score since I've always heard how BK ruins your credit. 3 months after opening the accounts her credit score shot up 100 points to the 670's.

My question is , and this is hypothetical: if two equal people with a 670 score applied for say a car loan; one with a BK and one without, does the dealership care? Or do they just look at the score. It sort of amazes me that you can recover so fast to a very reasonable score. I know certain CC companies flat out reject people with BK's so that's another thing.

After seeing this I found a thread about how most people can get to a 700+ score within 12-24 months of filing.

Almost makes me want to take out 100,000 in unsecured debt and be right back where I am a year later

[mathjak107]

it is likely going to be score based but it depends what fico score is used . there are 55 of them and all are weighted differently . different lenders use different weighted scores. your consumer score is not the same most lenders see .

[aslowdodge]

I had to,file a bk and my credit score did not come back that quickly. It didn't reach the high 600s until 6 years after I filed. For home loans the bk was pretty much a non starter.

[JONOV]

Originally Posted by UntilTheNDofTimE

Long story short, my GF filed chapter 7 prior to our relationship. After some time had passed I convinced her to open a secured credit card and take out a secured loan from her credit union to rebuild her credit. I thought this would be a long battle back to having a decent credit score since I've always heard how BK ruins your credit. 3 months after opening the accounts her credit score shot up 100 points to the 670's.

Its not unusual for it to rise after the BK...after all the debt-to-income ratio radically changes...Of course, some of it depends on how hard you work to raise the score post-bk.

Originally Posted by UntilTheNDofTimE

My question is , and this is hypothetical: if two equal people with a 670 score applied for say a car loan; one with a BK and one without, does the dealership care? Or do they just look at the score.

They don't just look at the score, but the BK in and of itself may or may not be the only factor. Remember, the car itself, loan to value ratio (amount of trade or cash equity), etc, is a big factor as well.

I think that if a 23 year old with one credit card and a short history came in and applied with a 670, she might have an easier time or be granted more generous terms than someone with a recent BK.

I've seen people with 780 scores denied because the bank thought they had too much CC debt, even though they were immaculate paying for it.

Originally Posted by UntilTheNDofTimE

It sort of amazes me that you can recover so fast to a very reasonable score. I know certain CC companies flat out reject people with BK's so that's another thing.

After seeing this I found a thread about how most people can get to a 700+ score within 12-24 months of filing.

Almost makes me want to take out 100,000 in unsecured debt and be right back where I am a year later

They can, but its a hassle, the equivalent of working a lot of cash jobs to avoid paying taxes and child support...

And anyway, while you can eat out and travel a lot, most things you buy you'll have to sell.

[rjm1cc]

It might be that you can not go bankrupt again for a number of years.