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Posts: 90
Registered: ‎11-12-2010
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Considering BK? FICO told me if you file BK paying your bills on time won't help you

[ Edited ]

I had an excellent payment history going into BK and paid my bills up to filing BK.. I had many accounts and only one of those went   30 days late with the BK filing.


FICO shows on its analysis of why I have a low score is because I have a "bad payment history," which is false. I printed out my credit reports and can document 10 days after filing BK  they show  I paid on time and have an excellent history. FICO is showing my accounts are 60 days late or more. My actual credit reports from TU and EQ do not show I'm 60 days late. When I challenged FICO's analysis of my payment history, I was told it does not take into account my payment history for accounts included in BK but considers only they were IIB and therefore are degragortory.   FICO's summary of my credit file says  "Your history of paying bills on time: Bad." Again, simply false.


FICO does not take into account people who file BK and pay their bills on time up until BK and clearly isn' t concerned  by this. When I raised that the analysis stated false, inaccurate information, I was told by a FICO rep "we're not a credit bureau."


The bottomline issue here is how does it affect my FICO credit score.  Six months after BK, my FICO TU score is 599 and FICO EQ is 628.  Those low scores are all derived from one single event, the BK, and no late payments. Yet FICO's own online analysis of my credit reports says the reason for the low  score is "History of paying bills on time: BAD," a false statement. (My Quizzle/Experian score is 718, CreditKarma is 702 and gives me an A rating. I know these are so-called fakos. But I don't think so highly of the FICO scores and its inaccurate analysis of my payment history.)


 I'm sending FICO's score analysis of my credit reports and my printouts of my actual credit reports from immediately after BK that shows my payment history  on all my  accounts to various consumer groups who montior credit agencies such as FICO to show  FICO's inaccurate, false analysis that I have a history of late payments. Legally, you can't have late payments once you file BK.


Regular Contributor
Posts: 238
Registered: ‎09-09-2009
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Re: Considering BK? FICO told me if you file BK paying your bills on time won't help you

you are going to pay a very heavy price that is fico pts for the first two yrs post bk then you should a bump at the two year mark.

Valued Contributor
Posts: 1,065
Registered: ‎05-26-2010
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Re: Considering BK? FICO told me if you file BK paying your bills on time won't help you

You haven't told us enough to give advice on how to raise your scores, or what your reason for raising it is.  (For example my goal was a 640 mid-score to be able to buy a house with FHA two years after discharge).


Each IIB account is a derogatory, and seems to be considered a "failure to pay".  You can't get around that, it's true and will stay on your report 7 to 7.5 years.  As time passes the impact will be reduced, I haven't hit the two year mark so can't say whether there's a "bump" at two years.  But I raised my score significantly since my discharge.


Remember your mix and age of credit are big factors.  From what I've seen (my experience and postings read here and elsewhere), you need "at least two" major credit cards (I sought three), and a revolving loan.  A mortgage helps but unless you had a house and either reaffirmed or are doing a stay-and-pay, and the lender is reporting, you won't have that.


For your credit cards, two of the three should report a zero balance, and the third should report "less than 10%" (some say "9% or less).


To get credit cards you may need to secure them with savings deposits initially.  Credit Unions are a good avenue, I did a "double play" by depositing $1,000 with the CU to secure an installment loan, took the $1,000 loan proceeds and deposited into savings for a secured VISA card.


You probably won't get anywhere arguing with FICO, they will succeed in saying they aren't a CRA and just provde a scoring service based on CRA data.  Focus on the accuracy of your reports, good habits, and modest use of reestablished credit, based on secured cards / loans if necessary to get started.

BK7 Filed 8/11/2009 Discharged 11/23/2009. Purchased new home 4/11/2012
Starting Score:11/16/2009 EQ 566 11/16/2009 TU 538
Interim Score: 12/27/2012 EQ 683 09/17/2012 EX (lender) 670 1/01/2013 TU 701
Current Score: 11/06/2013 EQ 708 11/06/2013 EX 702 11/16/2013 702 11/06/2013 TU 729
Goal Score: EQ 740 EX 740 TU 740
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Posts: 90
Registered: ‎11-12-2010
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Re: Considering BK? FICO told me if you file BK paying your bills on time won't help you

Chasmith, thanks for your advice. I only have one CC currently. I'll go to my CU, where I bank, this week and see if I can copy your move to get a secured loan and use that for a secured card. I think this is excellent advice and strategy. Thank you!

Valued Contributor
Posts: 1,168
Registered: ‎01-22-2008
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Re: Considering BK? FICO told me if you file BK paying your bills on time won't help you

After our BK, accounts that had zero balances and that we didn't include in our BK became IIB all on their own.  Now becoming a derog account when in fact it wasn't.  I can understand your frustration on that.  BUT if you can keep your bills current up until filing the road BACK from BK is much easier.  Also, when it comes to a lender, or even a landlord, manually looking at your credit reports and seeing all of your on time payments up until the date of filing, that looks much better for you.  We in fact had a landlord who asked what our credit history was like when we went to rent a home.  We told him we had the bk.  He said he wasn't worried about that as long as everything up to that point was good.  And I also think that when repairing afterwards, writing a GW to an account that was in good standing prior to the BK will give a slight advantage in getting them to make some gw adjustments.  IMO, if you can still pay your bills, do it.  Our bk lawyer actually did instruct us to stop paying bills and save our money (including our mortgage which was current), we chose not to listen to that advice even though he was a very good bk atty.  Getting credit afterwards was much easier and not as stressful as some of the posts I read here. 

CH 7 Filed 7/27/15 Discharged 11/16/15
Starting Score: EQ 620 TU 568 EX 593
Current Score (07/13/16): EQ 674 TU 649 EX 674 (FICO's 08)
Cap1 QS ($5350) (Combined QS and QS1) Discover It ($4100) MilStar ($8,600) Fingerhut ($800)
Off to the garden 05/01/16

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