cancel
Showing results for 
Search instead for 
Did you mean: 

Chapter 13 Effect On FICO Over Time

New Contributor

Chapter 13 Effect On FICO Over Time

I noticed that the FICO simulator question about bankruptcy gives as a last choice "more than 4 years ago". Does this mean that there is no positive effect on FICO score between years 4 and 7 after the filing of a chapter 13?

No Apps since February 2016
Chapter 13: April 2013 (Discharged March 2015) EQ FICO 591
Current FICO Scores June 2016: EQ 729 TU 737 EX 715
Goal Score: 740 Across the Board
Take the myFICO Fitness Challenge
Message 1 of 3
2 REPLIES
New Contributor

Re: Chapter 13 Effect On FICO Over Time

This is copied from the Central Ohio Credit Union Website - Hope you find it useful

 

Understanding & Improving Your Credit Score

 

Components of a Credit Score

  • 35% = based on payment history (i.e. on-time pays or delinquencies and more weight is put on current pay history)
  • 30% = capacity
  • 15% = length of credit
  • 10% = accumulation of debt in the last 12 - 18 months (# of inquiries & opening dates)
  • 10% = credit mix (installment raises scores, revolving lowers score and the number of finance companies lower the score as well)

Approximate Credit Weight Each Year

  • 40% = current to 12 months
  • 30% = 13 - 24 months
  • 20% = 25 - 36 months
  • 10% = 37+ months

What actions hurt a score?

  • Missing payments (regardless of the dollar amount, it will take 24 months to restore credit with one late payment)
  • Credit cards at capacity (i.e. maxing out credit cards)
  • Closing credit cards out (this lowers available capacity)
  • Shopping for credit excessively (auto & mortgage shopping do not have a negative effect)
  • Opening up numerous trades in a short period of time
  • Having more revolving loans in relation to installment loans
  • Borrowing from finance companies

What will improve a score?

  • Paying down on credit cards
  • Not closing credit cards
  • Continue to make payments on time (older late payments will become less significant over time)
  • Slow down on opening new accounts
  • Acquire a solid credit history with years of experience
  • Moving revolving debt to installment debt

What doesn't affect the score?

  • Debt ratio
  • Income
  • Length of residence
  • Length of employment

Scoring "Cheat Sheet"

  • Almost impossible to score 700+ points with any current delinquency
  • Almost impossible to score 700+ points without good capacity
  • Will always score 700+ with good capacity and no public records, current or past delinquencies
  • Will always score 500 point range or lower with no capacity and current delinquencies
  • Will score 600 range if doing well with how you pay and okay in capacity
  • Will score 600 range if doing well with capacity and okay in how you pay

Impact of Bankruptcy

730 Score (at time of Bankruptcy) = Loss of 200 points = 530

560 Score (at time of Bankruptcy) = Loss of 30 points = 530

No Apps since February 2016
Chapter 13: April 2013 (Discharged March 2015) EQ FICO 591
Current FICO Scores June 2016: EQ 729 TU 737 EX 715
Goal Score: 740 Across the Board
Take the myFICO Fitness Challenge
Message 2 of 3
Valued Contributor

Re: Chapter 13 Effect On FICO Over Time


Horrace36 wrote:

This is copied from the Central Ohio Credit Union Website - Hope you find it useful

 

Understanding & Improving Your Credit Score

 

Components of a Credit Score

  • 35% = based on payment history (i.e. on-time pays or delinquencies and more weight is put on current pay history)
  • 30% = capacity
  • 15% = length of credit
  • 10% = accumulation of debt in the last 12 - 18 months (# of inquiries & opening dates)
  • 10% = credit mix (installment raises scores, revolving lowers score and the number of finance companies lower the score as well)

Approximate Credit Weight Each Year

  • 40% = current to 12 months
  • 30% = 13 - 24 months
  • 20% = 25 - 36 months
  • 10% = 37+ months

What actions hurt a score?

  • Missing payments (regardless of the dollar amount, it will take 24 months to restore credit with one late payment)
  • Credit cards at capacity (i.e. maxing out credit cards)
  • Closing credit cards out (this lowers available capacity)
  • Shopping for credit excessively (auto & mortgage shopping do not have a negative effect)
  • Opening up numerous trades in a short period of time
  • Having more revolving loans in relation to installment loans
  • Borrowing from finance companies

What will improve a score?

  • Paying down on credit cards
  • Not closing credit cards
  • Continue to make payments on time (older late payments will become less significant over time)
  • Slow down on opening new accounts
  • Acquire a solid credit history with years of experience
  • Moving revolving debt to installment debt

What doesn't affect the score?

  • Debt ratio
  • Income
  • Length of residence
  • Length of employment

Scoring "Cheat Sheet"

  • Almost impossible to score 700+ points with any current delinquency
  • Almost impossible to score 700+ points without good capacity
  • Will always score 700+ with good capacity and no public records, current or past delinquencies
  • Will always score 500 point range or lower with no capacity and current delinquencies
  • Will score 600 range if doing well with how you pay and okay in capacity
  • Will score 600 range if doing well with capacity and okay in how you pay

Impact of Bankruptcy

730 Score (at time of Bankruptcy) = Loss of 200 points = 530

560 Score (at time of Bankruptcy) = Loss of 30 points = 530


have to argue with the impact of score. before i filed i was around 530, the bk increased the score because i essentially had no debt

Message 3 of 3