Yes, your own bottom line is the most important score, and too often we obsess about credit scores hen we should be empowered to name our own terms to the creditors. Prior to my BK, I had credit scores usually in excess of 750. I paid higher interest rates THEN than I do now post BK, on everything except for credit cards. And credit card interest, as we all well know, is a will'o'the' wisp type thing, fluctuating at the mere whim of the card issuer. I guess I should rephrase even my statement about credit cards - depending on what day you are talking about, I MAY have had lower rates pre-BK, but then again I may not have. I DID have enormous ungodly credit limits that I never even came close to using ....... I think one of them had a $50,000 credit limit. But post-BK I have paid no interest on CC so what difference does it actually make? My mortgage pre-BK was a full 3 points higher than the one I qualified for today. One car loan was 8 points higher pre-BK and one was 11 or 12 points higher. What did I get for my excellent credit? Terrible interest rates, thats what! High FICO scores are a license for unethical car dealers and mortgage brokers to screw you over! They flatter you with those evil scores, and then send you down the river. High FICO scores are just an invitation for usurious creditors to line up for a chance at a big fat (and for me, dumb) slow-moving target.
If you haven't put the loan "out to bid" you don't know what market is. The easiest money for both lender and dealer is to charge a prime borrower sub-prime rates. No risk, good fees up front, no-one the wiser, everybody's happy. One problem, though, is that FICO usage crosses over into areas other than borrowing, such as insurance rates.
If you ever carry any balance on CCs, always get it by BT to a different card at a fixed rate. Also, just as CC companies evaluate you via your credit reports, you evaluate everyone you do business with based on their terms, and their abiding by their terms. Those who do not resolve problems, or act in an unreliable manner need "weeding". This includes their visible activities toward other consumers. If they don't deal straight, you don't need them. Promising X but delivering Y gets them blackballed. You are your own purchasing agent.
Yes, you are "your own purchasing agent." And I look at lenders and retailers who fixate on low FICO scores, without looking at more, as just making excuses for screwing you. They charge high interest rates because they can, because YOU let them. My BK was due to a horrendous medical catastrophe that lasted 6 months and consequently loss of a job that I had held for 8 years. This is all extremely well-documented, so maybe that is a big reason why I have had no problems getting very low interest rates even with sub-sub-sub-prime credit scores. I also do not take "no" for an answer. I have learned to walk away, and go somewhere else. I have learned to be persistent. Never give up. The highest interest rates I have actually paid was 18% on the first car out of BK, and I wouldn't have paid that if I would have listened to an extremely ethical finance manager who begged and pleaded with me to join a CU. I was too dumb then to take very good free advice. Now when I go into a retailer to open a credit card account, I ask them if they rely on FICO scores and if a fresh BK is any impediment to getting the card. If they answer affirmatively, I pointedly ask them for directions to their direct competitors if someone up the foodchain cannot override those "automatic" "requirements." (they know and I know that someone always can). I managed to qualified for a Sears card on the spot, and everyone knows how persnickety Sears can be to qualify.
"If you haven't put the loan "out to bid" you don't know what market is." I have put the loan out to bid and the credit union refi is as good as it gets, especially since it is a no closing cost loan. The credit union flat blew away every single other offer I recieved by putting the offer out to bid on two different internet loan searchers. I do not think a 6.5 percent low doc no closing cost loan one year post-Chapter 7 discharge could be considered really "sub-prime" in anyone's book. "The easiest money for both lender and dealer is to charge a prime borrower sub-prime rates. No risk, good fees up front, no-one the wiser, everybody's happy." I absolutely heartily agree with that statement. That has to be the biggest ripoff out there, especially with home mortgages. Think about it: unless you live in some freakish location where housing prices are either staying flat or declining, there is absolutely no risk whatsoever in most housing markets. Prices absolutely skyrocketed in my area 35 percent last year and 33 percent this year. Yet many people bought houses two years ago, with good credit scores, and are paying terrible sub-prime rates, 8, 9 and even 10 percent! How can that HAPPEN? Oh gawd, my dad is a prime example of the above statement. He got a 16.99 percent car loan with FICO scores in excess of 750, with no BK or any other major blemish on his CR!
He would have done better with a BT to a decent CC, provided his available credit was high enough that he didn't take a hit on other accounts.
You don't get what you deserve, you get what you negotiate or tolerate. That applies whether you are negotiating interest terms, or whether you are negotiating clearing up a billing error due to someone else's screw-up. Having accepted or negotiated an acceptable deal is not always enough, since you may then need to hold them to it. The first step, however, is screening who you even do business with, as some companies are incompetent or unethical, and any business with them is potentially toxic. For example, you have mentioned how some people with good credit have none-the-less been given sub-prime loans. Even worse is when they are then locked into those loans, if, say, the lender deliberately delays posting of payments to collect extra fees and trash their credit. If you are a responsible lender, lender beware. If you are a responsible borrower, borrower beware.
