Rebuilding Credit: Why?

[AngelinaCatHub]

My explanation: Mrs. Cat and I were discharged 2008. To date we made no new debt. I abused our Overdraft account which I guess was debt but paid it off a year ago. I was talked out of lowering that account and guess what, I ran it up again. This year I paid it off and lowered it to an amount only to be used if I over ran out debit card.

I was told by the head of the credit department a year ago I could get a loan any day at my C.U. I've been a 47 year member and without ever applying for credit I am 670. Before BK I was 820.

I found a replacement car for our old car and went into car insanity. Here is what we have decided to do, my last email to my loan officer:

Dear Ms. xxxxxx:

As I stated in my first inquiry for a loan for a much needed truck (car is 230K miles and trans slipping). In doing so I found a real cherry new Ford Ranger with only 5K miles.

With my and my wife’s deepest searching of our souls, We have decided that in the five years of no credit and cash only basis after our bankruptcy discharge, I feel I would be irresponsible to again take up a bill I can afford, but feel it to be a “slippery slope” into credit debt.

I am sure you would approve me, for eighteen thousand for this nice truck, but I really need to find an older cheaper truck I could afford to drive until it quits and be able to buy another if it does. This way perhaps we could get ahead and even go out for dinner at times rather than mortgage ourselves into a large payment.

I regret causing you inconvenience on my behalf and if I could use your services to find a decent more justifiable truck at 5K or less, may I call you for that small amount rather than an 18K loan. This would be a controllable amount with little worry. I must feel right about this. I even requested that my O.D. credit line be reduced from $2500 to $500, and it feels so good not to owe anyone. Our house is paid off and we have NO bills.

Thank you very much for your patience and understanding.

xxxx xxxxxxx



The point is, don't lose sense over STUFF. Hub'

[AngelinaCat]

I have to add a comment or two to 'Hub's post:

We started this exercise as a way to help our God-daughter get a nice used truck that was a private sale for 7K. That truck sold before we could do anything about it.

Then we found a nice used Ford truck for 18K at one of our local dealerships. The problem with this is that ALL for the name brand car/truck dealerships in our town is owned by ONE person. So we have a monopoly going.

After wasting one day being baited and switched by the Chevy dealership, we found another very nice truck at the Dodge-Nissan dealership.

Remember, ALL OF THESE dealerships are owned by the same person.

So, after telling a salesman at this place that we were not going to be abused by him, the same way we were at the Chevy place, we spent another damned useless day undergoing that very same process.

This was after we had already told BOTH salesmen at BOTH places that if approved by our CU, we would only be paying around 3.5% interest. Neither one of these turkeys liked that, and tried their very best to sucker us into THEIR financing with interest rates somewhere "in the teens"--15% at the very least and probably higher. Plus they wanted at least 1K down and payments over 6 years! And tried to force us into that by actually raising the price 1 or 2K if we went with our CU.

Bait and switch.

No damned way.

'Hub found the identical truck to the one we had been looking at at the Dodge-Nissan place at a Carmax in Tennessee, with about 40k FEWER miles than the one at home. ('Hub is at his brother's place in Tennessee for a week.)

At this point the 'New Car Fever' started setting in. We could certainly use a nice little truck on our farm; and it would be ours and not the G-Daughter's. It is way too light for what she needs. Plus, 'Hub's Jetta Wagon is aging and beginning to fail.

But we both have been thinking and praying. When we talked tonight, 'Hub asked for my honest thoughts. I said: "On the one hand, I have actually been praying that the loan not go through; I think we would be strapped financially for too long, in this uncertain economy, and remember, that for all intents and purposes, we are on a 'fixed income'."

'Hub: "Really?"

Me: "Yes, really. However, there is the other hand--there is always another hand, and that is, we/I could REALLY use a nice little truck around here."

More discussion followed, but the consensus is that G-Daughter needs to look for something that will really suit her needs, and then maybe we can help her a bit.

[tobee43]

i know this is such a difficult decision to make, to commit to something and be in debt or at least feel as though you are.

we have also thought about being in the same situation as you when it comes time to get another car. my general belief was to just get what we can pay cash for and deal with it. however, as we get older and have to do traveling for business or medical reasons, my biggest concern becomes the reliability of the car/truck. i don't want to be stranded on a 99 degree day out in the middle of no where highway. so we have thought at the very least we would have to buy of course a "lesser" car then the last on we paid cash for, but if we don't have enough to cover it we will incur the debt.

the reasoning also is it will affordable or we will stay within the means of what is affordable to us, much like the home we purchased.

don't fill guilty or fret about this, you need a reliable, safe mode of transportation, both for your peace of mind and also the thought about purchasing an older car may also incur increased maintenance and care cost that may begin to add up quickly.

one thing for certain, these places you are going i would never buy there. actually, even when we were up north and there were hundreds of dealers in our general area, we chose on that was over 2 hours away, they gave us the best deal and they were the best to work with. so don't think these dealerships are the only one's in "town" ....just move on to the next town

it will all work out, my friends, but again, affordability, reliability and safety first!

[iswmle]

After my BK I told myself a few things:

Never going to marry again.

Never going to be in over my head with money again.

Never going to have another car loan.

Well, almost three years since BK, and 5 years since divorce I am now engaged. But I have been much more faithful to the other things I promised myself. I remember how I use to get so swept up in the idea of owning a new car, and now I find that temperament to be calmed. I attribute it to several factors in my life that are different than what they were five years ago. I told my fiance the other night that I still cringe at the idea of taking out a car note, especially since I know we are so capable of saving for a car we like... even on our piddly poverty level income.

Call me a hypocrite, but my view on housing is different. I have grown up in the generation of the American Dream, and my desire to own a home has not died out since filing. The ONLY reason I am working on building credit is to buy a home. Now I know there are other options out there to get a house rather than through credit... it is not something I am well researched in, and frankly I don't see a problem in getting a 15 year loan and paying the house off as soon as possible.

My mother has been quite inspirational to me. She paid off our child hood home, and almost immediately bought a second house. That second house she paid off in a year and a half. She has always been amazing with money and credit, and she never ceases to amaze me. Now while I don't believe I can purchase a home and pay it off within a year I DO believe I am capable of paying it off before 15 years.

Since my BK I feel like I have proven to myself that not only am I capable of managing money, I really enjoy it. There is a great pleasure in watching your savings account increase over time. I think coming out of BK is real similar to losing weight: you don't go on a diet, you go on a lifestyle change. One changes the way they have been taught and grown to manage money until it becomes second nature. I try to stay on my toes, though. It is easy to say "This will never happen to me again", and watch it most certainly will. So I try to stay safe, and not drift to far from my past. Better to keep the mistakes of that in mind...

Sorry so long winded, but that is my rebuilding credit WHY story.

EDIT: I want to add, since Hub touched on "car fever"... one thing I did have, and still do have to a degree is "credit card fever". There are certain forums that you will find that put a lot of status and value on not only having a credit card, but also having the super duper ridiculous credit limits. I admit, I was very caught up in that Pre BK. Even today, when I read these forums, I find that same adrenaline rush in the idea of going on an "application spree". I have come to really hate that mentality. A slippery slope, indeed.

[Pjmax]

After my BK I told myself a few things:

Never going to marry again.

Never going to be in over my head with money again.

Never going to have another car loan.

Well, if you have to pick one of the above to go back on, you picked the right one! Congratulations!!

[iswmle]

Hahaha, thank you. Life goes on, it is up to us to make the best of it. ;)

[AngelinaCatHub]

EDIT: I want to add, since Hub touched on "car fever"... one thing I did have, and still do have to a degree is "credit card fever". There are certain forums that you will find that put a lot of status and value on not only having a credit card, but also having the super duper ridiculous credit limits. I admit, I was very caught up in that Pre BK. Even today, when I read these forums, I find that same adrenaline rush in the idea of going on an "application spree". I have come to really hate that mentality. A slippery slope, indeed.

Iswmle: The lust for a "Vanity Card" is very dangerous above what you named at your beginning. (Grats on the engagement). You see, mentally the piece of plastic does not resemble money or wealth. It represents FREEDOM!! This is the wrong type of FREEDOM to spend money YOU DO NOT HAVE. The "STUFF" is less valued to you than if you had saved for it. It is a slippery slope to your second bankruptcy. It also represents what our Country is facing. No I'm not going into politics, just seeing what is obvious.

Except for rare reasons, DON"T SPEND MONEY YOU DON"T HAVE. I am bill free since 2008, and that lesson will stick with me. I no longer sell my soul. 'Hub

[IBroke]

Well, if you have to pick one of the above to go back on, you picked the right one! Congratulations!!

Hmm..I guess I would pick the car loan.

Well, being single has its advantages, too..

[justbroke]

I just had this same issue. I don't need a new car. However, I just received two pre-approvals. One was from my credit union and the other was from the local BMW dealership. I drooled over the thought of a shiny new BMW. I than ran the payment calculations and thought... over $600/month for 5 years... THEY ARE CRAZY!

I feel better now! I have a debt plan to pay off the car I have now within the next 12 months. To think that I was about to sign up for another 5 years.

[Pjmax]

I paid off my loan on my 2002 Escape a year ago. The last 5 or 6 mos. of the loan it was hard to make the payments and I got behind twice. It's been a whole year without a car payment, and I still wake up sometimes in the middle of the night scared that I'm hearing the repo truck outside.

I am working on rebuilding my credit. I think I'll get a few more years out of my car, but I will have to get another eventually. I hope the nightmares will be gone before I need a new one.

[frogger]

I guess that I'm different than some, for I am working to rebuild my credit and my credit score.

We did get a car loan (used car), that I could have paid for, however I chose to finance it. Took out a 4 year loan that will be paid off before the end of this year (less than 2 years)

I do have a couple of credit cards (no vanity cards) that are treated like a debit card. The cards get paid off once a week and I'm earning cash back.

A few other things are in the works as well to improve my credit score as well.

I have no desire to be in debt as well, but when used wisely, the ability to get credit at a reasonable rate is just another financial tool that I want to have the ability to use.

And fyi, my credit score now is almost 100 points higher than before I filed for bankruptcy.

[justbroke]

frogger, I understand exactly where you are coming from. I have rebuilt my credit and I'm on target to be comfortably in the 700s (over 730) this time next year. I'm not chasing a score, just managing my debt! I purchased a car because my 2003 vehicle, well, was just not cutting it anymore. I too have 2 credit cards from my credit union and I use them for work related travel (reimbursed).

I just find it interesting that some of our "old" instincts (habits) are hard to die! I actually was excited to receive the offer to buy another car (pre-approved) from my bank and a dealership. I always wanted a BMW. After serious consideration, actually looking at cars online, my post-BK brain kicked in and forced me to answer the questions; why? and why now? I couldn't find a sufficient answer so I was so pleased to close my browser and do something more productive. I had a friend just tell me that I should have bought the car. She tells me that "you have money" and "you can buy whatever you want". However, those don't address the questions about whether I should buy a new car, and why I should do so now? Especially with a 2012 Ford siting in the driveway.

I am very much an impulse buyer and I am learning to keep those impulses at bay. I'm such an impulse buyer, that now that the car is off the radar, I started looking at buying foreclosure homes. Yes I was. I was up until about 3AM last night doing so. I was calculating down payments, interest rates (which are very good right now and all were under 4% for 15/30 years), and payments. (These were for older single family homes all under $70K) (See my last message above at 1:19AM where I gave up the car... yeah... that didn't work because I started looking at houses.)

One day, I may figure out what drives this need to purchase something!

[frogger]

I understand the impulse buying, for that was me in my previous life. Now however, unless it is a necessity, it get put off for a week or two to see if I really need it or not. That has cut out my impulse buying. Should have done that a looooooooooooonnnnnnnng time ago.

[iswmle]

Iswmle: The lust for a "Vanity Card" is very dangerous above what you named at your beginning. (Grats on the engagement). You see, mentally the piece of plastic does not resemble money or wealth. It represents FREEDOM!! This is the wrong type of FREEDOM to spend money YOU DO NOT HAVE. The "STUFF" is less valued to you than if you had saved for it. It is a slippery slope to your second bankruptcy. It also represents what our Country is facing. No I'm not going into politics, just seeing what is obvious.

Except for rare reasons, DON"T SPEND MONEY YOU DON"T HAVE. I am bill free since 2008, and that lesson will stick with me. I no longer sell my soul. 'Hub

Haha, let me tell you a story: There was this not so nice girl I use to work with, that had a bad habit of cheating on her fiance and spending his money. She was the one and only blatant gold digger I have ever met in my life. I remember once her saying: "My fiance has $10,000 in his savings, but it will be gone by the time I'm done." And all of us sitting around with our mouths hanging open. One day she came in bragging about all the new goodies her fiance had bought her. She was showing us her clothes, jewelry, new purse, etc. and someone asked: "Wow, how much did this spending spree cost?" And she said, verbatim... lol, I will never forget this:

"Nothing! It was free. We put it on his Discover card."

I just about died. Even when I was at my worst I knew better than that. Later that evening I told my fiance the story who said something that I really liked. He said: "When I use my credit card I am thinking I am buying this now, I will get a bill, and the bill has to be paid. Just like our internet, our gas, rent, etc." And in all the years my fiance has had a credit his ytd of interest paid: $0.

This girl went on to marry that guy, btw. Poor dope.

Justbroke: Was that $600 in payment alone or insurance as well? I always forget to include insurance, and especially full coverage. I am a *bit* of an impulse spender, but I can rein it in pretty easily. Someone very close to me described me as being "95% miser, 5% impulse shopper". Which is pretty accurate. My impulse shopping consists mostly of eating out, and purses, lol... and all of my impulse spending is usually followed by a healthy tablespoon of guilt.

[justbroke]

Justbroke: Was that $600 in payment alone or insurance as well? I always forget to include insurance, and especially full coverage. I am a *bit* of an impulse spender, but I can rein it in pretty easily. Someone very close to me described me as being "95% miser, 5% impulse shopper". Which is pretty accurate. My impulse shopping consists mostly of eating out, and purses, lol... and all of my impulse spending is usually followed by a healthy tablespoon of guilt.

That was without the insurance and any other extras.

I understand the impulse buying, for that was me in my previous life. Now however, unless it is a necessity, it get put off for a week or two to see if I really need it or not. That has cut out my impulse buying. Should have done that a looooooooooooonnnnnnnng time ago.

That is what I have learned. The secret was to put it off for a day or two (or a week). After I stopped thinking about it for a few hours, the "impulse" to purchase the car subsided. It was immediately replaced by the need to buy a(nother) investment home! There is something wrong!