That's exactly what the finance director of the Toyota dealership in Indianapolis told my wife and me nearly 13 years ago when we applied for credit.

My wife, Michele, wanted a Toyota Camry. And even though we had just filed bankruptcy, we were quickly reestablishing our credit. We weren't spending frivolously, we were saving, and we were paying our bills on time every month.

So we go into the dealership-I remember this as if it was yesterday-we fill out the credit application and we're feeling confident we'll get a good deal on the car.

Then the finance director comes in and says-I'm not exaggerating here-he says...

"Son, have you ever heard of the saying, 'cream of the crop?'"

"You're what we call the cream of the crap."

"Cream of the CRAP?!?!"

I didn't know whether to laugh or hit him.

He went on to say...

"You see son, you've done everything right after your bankruptcy, but I still can't help you."

On that day I quickly learned that, in a car dealer's mind, there are only two kinds of bankrupt debtors...

1. Those who learn from their mistakes and take pride in having excellent credit after bankruptcy
2. Those who still struggle to pay their bills on time after bankruptcy

What I didn't understand at the time was even though I could afford the car payment and I had perfect credit after bankruptcy-Toyota Motor Credit wouldn't touch us with a ten-foot pole.

In Toyota's eyes the "cream" didn't matter. As long as we had a bankruptcy showing on our credit reports, we were still "crap."

Each lender makes their own rules on how and whom they lend money to. These rules are called "credit guidelines."

If you want to get approved at the best possible terms when buying a car, it's important you know a car lender's credit guidelines before you apply for credit...especially if you're bankrupt.

It will save you time and frustration-but more importantly, it will help you avoid credit inquiries that may lower your FICO credit scores up to 12 points per inquiry.

So, Step 1 in making a lease or buy decision is to determine a lender's credit guidelines. You start by asking if they lend to people with a bankruptcy. If so, on what terms?

That's right. You have to be upfront that you've filed bankruptcy. Don't hide it. We have to face the fact that some dealers just won't work with people who've filed bankruptcy. So our job is to find the ones that do.

Some lenders will only lease to people with a bankruptcy. Others will only offer purchase financing. Yet still others will only lend using a hybrid of the two-this is especially common in Texas.

Ask the finance director at the dealership to direct you as to what structure the manufacturer prefers.

And here's a quick tip for you: if your BK doesn't appear on the credit report your lender pulls-then, in the eyes of the lender, you're not bankrupt.

The only lenders I would consider using are:

- First choice: Captive lenders (car manufacturers)
- Second choice: Banks (not finance companies)
- Third choice: Credit unions

Ninety-nine percent of the cars I've leased over the years have been with captive lenders. Just one was leased by a bank.

That particular deal came from a conversation I had with Amy, the finance manager at the local Land Rover dealership here in Indianapolis. Nice gal. I told her I was open to her financing recommendations, but I preferred financing through the car manufacturer.

I told her my current FICO scores. She immediately said that with my scores she could do better through a local bank. I signed a credit application and told her to go for it.

The next day I signed a lease agreement with that local bank. Being open to her advice literally saved me hundreds of dollars a month on that car.

So be flexible...but be careful. It seems most car dealers call all of their funding sources banks. When in reality some are banks, some are credit unions, and most are sub-prime finance companies.

Here is a list of some of the most commonly used sub-prime auto finance companies:

* HSBC Automotive
* Capital One
* AmeriCredit
* WFS Financial

You want to pass on the sub-prime finance companies-unless you have exhausted all other options. Sub-prime lenders should be your last resort.

And only use credit unions if they report to all three national credit reporting agencies. How do you find out if a credit union reports to all three credit reporting agencies?

Simple-you ask.

Ask the branch manager at the credit union if they report. And after you get the loan, check all three of your credit reports and make sure their trade line appears on each one.