Best prediction of future behavior is past behavior. So, a bankruptcy usually means that the person got out of control with their finances. And the statistics show that a high percentage of people who get out of debt by bankruptcy, or being given money, just do it again. It’s not usually an issue of money, but an issue of spending. It’s like weigt loss. Treat it like a diet, and you gain it back. Treat it as a lifestyle change, and you can beat it.
I know that some people have actually had somebody bad happen to cause the financial problem, such as huge medical bills, house fire, earthquake, etc. But most of us simply got in over our heads with credit and spending. And that is what they are looking for.
Also, insurance companies have figured out that people with bad credit get into more accidents. I don’t know why. Perhaps it is the stress. Perhaps they think people who are careless with money are more careless with driving. I really don’t know. But they have done studies and found that people with bad credit do cost them more in paying out insurance. So, they charge higher rates for people with bad credit.