topic Re: Why is it so hard to get credit after a BK?! in Bankruptcy

Why is it so hard to get credit after a BK?!

jdirilo — Wed, 19 Sep 2012 20:27:00 GMT

I had a Ch7 discharged in Oct 2009. I knew nothing about rebuilding credit at the time, I was just under the impression that I couldn't ever get credit again. I mostly had small collections and tons of medical bills that were included, as well as a couple of judgements. Well, I recently found this forum, have been keeping an eye on my credit reports and scores, and was approved for a secured card with Cap1 ($201), a secured card with my bank Wells Fargo ($500), unsecured $500 with cap 1, and $500 unsecured with NFCU. I have applied like an idiot everywhere else I can think of and just denied left and right. I tried to get an account with local CU's and all denied because of some old info reporting on Chex systems that was included in my BK and one that was settled. I tried to recon with Chase, Discover, Citi, & walmart. All of them said no way. So, is there any other place I can try and get credit? The good things on my credit are a recent car loan for $9200, several student loans($20,000) that are deferred until I finish school in a couple years, and a small personal loan for $495. All of those are paid on time, no issues there. I guess I should STOP apping for awhile, but it is just so addicting :( Any suggestions? Please be criticize constructively!

Re: Why is it so hard to get credit after a BK?!

laz98 — Wed, 19 Sep 2012 23:37:14 GMT

You already have 4 cards, & you have some installment loans that are also positive. I think you need to stop applying for more credit & try to be patient.

Re: Why is it so hard to get credit after a BK?!

Comet21 — Thu, 20 Sep 2012 14:31:47 GMT

I agree, you do not need anymore credit. Just continue to build with the credit you have.

Re: Why is it so hard to get credit after a BK?!

jdirilo — Thu, 20 Sep 2012 14:46:24 GMT

Thank you. I am too impatient. I was thinking since I was approved for one, I'd be approved for another. But that isn't the case! I'm trying to really take it easy....I will attempt to "garden" for awhile. It is SO hard!

Re: Why is it so hard to get credit after a BK?!

aussiesareforever — Thu, 20 Sep 2012 15:51:51 GMT

I literally rebuilt my credit with one card. I got the Capital ONe unsecured a few months after my Chapter 7 discharge and had it as my solo card for three years before I applied for a new card. At the time I was applying for a new card, my scores were in the mid 600s.

I will echo what everybody else has said. Stop applying and use the cards you currently have. Be patient. Good things come to those who wait.

Re: Why is it so hard to get credit after a BK?!

algorithmslave — Thu, 20 Sep 2012 19:58:11 GMT

jdirilo wrote:
I had a Ch7 discharged in Oct 2009. I knew nothing about rebuilding credit at the time, I was just under the impression that I couldn't ever get credit again. I mostly had small collections and tons of medical bills that were included, as well as a couple of judgements. Well, I recently found this forum, have been keeping an eye on my credit reports and scores, and was approved for a secured card with Cap1 ($201), a secured card with my bank Wells Fargo ($500), unsecured $500 with cap 1, and $500 unsecured with NFCU. I have applied like an idiot everywhere else I can think of and just denied left and right. I tried to get an account with local CU's and all denied because of some old info reporting on Chex systems that was included in my BK and one that was settled. I tried to recon with Chase, Discover, Citi, & walmart. All of them said no way. So, is there any other place I can try and get credit? The good things on my credit are a recent car loan for $9200, several student loans($20,000) that are deferred until I finish school in a couple years, and a small personal loan for $495. All of those are paid on time, no issues there. I guess I should STOP apping for awhile, but it is just so addicting :( Any suggestions? Please be criticize constructively!

Perhaps you need to wait for the numerologist to forcast your future probability of default.

Look, just be thankful that a BK is a fresh start and does not effect the score after. Atleast from my understanding. One charge off with a balance that still reports as late is way worse for the score than a BK ever will be. In addition, look at the bright side, I do not think there is a recidivism rate of BK worked into the score. Just in a perception of the lender/underwritier at the bank when they read your report. This of course falls off the radar after 'X' amount of years.

Re: Why is it so hard to get credit after a BK?!

Guyatthebeach — Fri, 21 Sep 2012 01:44:33 GMT

First thing first, I feel 4 cards are enough period. You are almost three years out of bankruptcy and that is a great thing!!!! If I were you, I would let my accounts age and help increase my score. The second thing I would work on is work with Capital One and Wells Fargo to convert those secured cards into unsecured cards. You have a mix of both, and given the time after your bankruptcy you should be done with secured cards. I would also focus on your credit usage and keep balances on them low if possible at least no more than 30%. It would be best to keep your credit card balances under 10% but that may not be realistic for everyone.

If you don't mind, what is your interest rate with your NavyFed credit card?

Re: Why is it so hard to get credit after a BK?!

somotao — Fri, 21 Sep 2012 17:25:32 GMT

Totally agree with what everyone has said....your focus now should be letting your cards age, and smartly utilizing the cards in your arsenal to get your credit score as high as possible. It is key to keep your balance under 10% and if you can manage the strategy a lot of people have advised by only letting one of your cards report a balance between 2% and 9% while the rest never report a balance in a few months your credit score will only continue to go upwards. I too am in a similar situation and have gained over 100 points since I started following the advice of people on this forum.

Re: Why is it so hard to get credit after a BK?!

jdirilo — Fri, 21 Sep 2012 21:55:24 GMT

Thank you everyone for your advice!

My NFCU nrewards card is an interest rate of 17.99%. I think it is the lowest one I have. I really need to stop apping! I checked my CR's again yesterday and disputed a few more collections that were paid, included in BK, and a judgement that needs to be removed also. I have been successful in removing 3 judgements off all 3 CR's so far, thanks to these forums! But, I haven't seen more score increase(which is probably because of all the stupid inq's). So would it be wise to start making payments on the charge off account? It is for about $2200. If it is worth it, then yes, I will do it! I was also thinking about making small monthly payments on my student loans. Do you think that will raise more score at all, if the loans are still in deferment? Thanks for all your help!

Re: Why is it so hard to get credit after a BK?!

Guyatthebeach — Sat, 22 Sep 2012 00:29:07 GMT

I would definitely stop apping. You actually fine with your credit cards overall in my opinion. If you allow six months to pass after your last credit inquiry, you will see a noticable increase on your score just by not having any more inquires and letting your accounts open age. Regarding the charged off account, why was that not included in your bankruptcy? If it was included, you should consider getting charge off removed. If it was charge off that was notin your filing, do you have enough cash on hand to payit off? The reason I'm asking is if you do have enough cash to pay it off, you should call the collection company that has it for a settlement.

As for the student loans, I would let them stay in deferment while you can and use the money to build up your saving reserve.

Re: Why is it so hard to get credit after a BK?!

jdirilo — Sat, 22 Sep 2012 02:21:34 GMT

I thought the inq's fall off after year? The charge off that wasn't included is from University of Phx. I didn't think I could include it in my BK because it was educational, but now I am starting to think maybe I could have. I don't have the $2200 to pay it off now, or even do a settlement. Probably not until tax returns :) I have never been able to save a dime in my life, I am horrible at it. BUT slowly and surely I am starting to. I opened a checking/savings with NFCU and I have just $25 direct deposited twice a month, so that is my savings for now. I have been with Wells fargo for a year, and they are not my fave bank so I was able to get an account with a local CU today, and they are working on reconsidering my credit card that I apped for 2 weeks ago. The guy was incredibly nice and understanding, he asked me about every single thing on my credit and I told him the situation at the time. He made it very clear that they are not solely about gaining business, but about maintaining member relationships and helping them get back on their feet when everyone else turns them down for credit. I won't have an answer til monday, but worst case scenario, he said they will offer me a shared secured loan to start with. I am totally ok with that, and trust me, DONE apping! I am going to have to get the hang of the "gardening" concept and commit to it for at least 6 months! Our lease is up in 7, and we want a house SO badly!

Re: Why is it so hard to get credit after a BK?!

shalane85 — Sun, 23 Sep 2012 19:41:07 GMT

I had the same thing from UoPheonix. You can absolutely include it because it is not a federal student loan. Mine was 10k.

Re: Why is it so hard to get credit after a BK?!

jdirilo — Mon, 24 Sep 2012 15:04:46 GMT

Well it's too late now! Will paying it off improve my score at all?

Re: Why is it so hard to get credit after a BK?!

shalane85 — Mon, 24 Sep 2012 15:51:57 GMT

Only if they agree to delete it. How long ago was your dishcharge?

Re: Why is it so hard to get credit after a BK?!

jdirilo — Tue, 25 Sep 2012 16:36:20 GMT

Oct 2009

Re: Why is it so hard to get credit after a BK?!

Carthoris — Tue, 25 Sep 2012 19:12:46 GMT

Everyone is correct. Patience is the key. I was discharged in 2007 and have been slowly re-building. Credit card here and there, maybe every 6 months to a year before trying another one. Multiple applications hurt your credit.

I only have maybe a total of 20K in credit card credit. Keep the balances low!

EQ: 801 EXP: 767 TU: 801

Re: Why is it so hard to get credit after a BK?!

AZHeather — Tue, 25 Sep 2012 19:20:49 GMT

When you are ready to pay that CO, you should try to do a pay for delete. If they refuse, you should still pay, but then try to get a goodwill removal after that. If that fails, take comfort in the knowledge that if your goal is to eventually buy a house, the mortgage company will require any and all collections and charge offs to show as paid.

You are at a good start. Keeping saving, using your cards, paying everything on time, garden what you have, and you should see a rise in your scores over the course of the next year or two.

Good luck! (NO MORE APPING!! :smileywink:)

Re: Why is it so hard to get credit after a BK?!

jdirilo — Tue, 25 Sep 2012 19:45:00 GMT

Thank you :) And congrats to the poster with an 801 score! That is awesome after a ch 7 BK! I wish I had known about secured cards and all this rebuilding info right after my bk was discharged, I would be in a much better position to buy a house. That is the plan in 7 months. So I will have to pay off the charge off account regardless? I was told that since I can't put my husband on the loan(complicated) they can only use me and my income, and since it's only like $26000 a year right now(I just started working this year) then it will be difficult to get a decent house with my income. Not that it has anything to do with credit, I got side-tracked.

I called all of the cc companies to find out my statement closing date to make sure that my cards are paid down or off by that date every month. I am going to hang out in the garden as long as possible to get some of those older inq's to fall off. I am completely open to any other suggestions or advice to get the ball rolling! Apparently, this is a very long process...

On a side note, I checked all 3 CR yesterday and in the past month I successfully had 3 judgements removed that were included in my BK but were still reporting. TU told me that they will still report, just as "included in bk" so I disputed them again, and yay, all were deleted and only the BK remains as a public record. I have written to GW letters, my first ever, and I will send them off today. One is to Chase Auto, for a car loan 4 years ago that ended up being totaled and we made a settlement for the balance owing, but they still reported two payments as 30 and 60 day late. Also one other GW for a small medical collection that was paid last month, $70, that they said they wouldn't delete, but I figure a gw letter won't hurt. Wish me luck!

Thanks for all the advice!