Ch 7 discharged in August 2007 due to business failure. re-affirmed 1 auto loan, 1 auto lease, and mortgage. The auto lease is up in Aug/Sept and the residual is too high to pay it out in cash. Well, we could, but it wouldn't be smart.
We can pay cash for a used car no problem.
However, I was thinking... would it be better to find someone ANYONE to give us an auto loan (without caring TOO much about the finance rate) and pay it off in 3-4 months in order to show that we 1) got the auto loan post BK and 2) paid it off. Would 3-4 months be long enough to show good credit worthiness?
my credit score is in the mid 700s, hubby's is in the mid 500s (he extended his personal credit to help the business, so got hit with the BK much harder than I did).
Financing for a long term- 5 years- and making all your payments on time- will have the best impact on your credit rating. I don't know if a short term loan would really make much of an difference, certainly not raise your scores as significantly as a long-term loan.
If you already have one car loan and a mortgage, then pay cash if you can. Don't waste any more money on interest. A few years of good mortgage payments will bring your scores up the best. (In my opinion)