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Melissalyn17
Posts: 56
Registered: ‎05-08-2012
0

Re: How to rebuild your score after a ch7 BK


SoulMaster wrote:

Your lawer probably told you that "it doesn't make sense to pay the bills" when you're about to file, or that "the courts frown on people paying bills immediately before filing and may throw out our BK if you pay them".  But that's beside the point.  Yes,  the lates will show until your filing date, with a KD on your discharge date.

 

However, if they are reported as IIB, those lates won't matter much, if at all.  

 

If you included the paid off cards in your BK, then they were included in the BK and are IIB/Derog.  If you didn't include them, the creditor most likely closed the account on their end (Account Closed by Credit Grantor), which is also a derog.    

 

Also, if you didn't list "paid off" revolving accounts as creditors in your BK, you may have inadvertantly committed bankruptcy fraud*.  I'm pretty sure that the law says you have to list "all creditors", not just the ones you owe money to.  I'll check with an attorney friend, though I'm also pretty sure that if you used an attorney, he/she wouldn't have let you commit BK fraud.

 

The simple version is, anything before your BK (and included in the BK) doesn't matter much once the BK is there.  Positive accounts that were closed prior to the BK will help you, but only a little.  what REALLY matters is  the date of your BK and everything that comes after it. 

 

-SM

 

*I checked with my friend, it's against the law, but there doesn't seem to be a punishment for it unless you paid some creditors immediately before BK.  Basically, you don't get to choose who gets your last $'s before you file.


I can't remember the exact wording my lawyer used (it was over three years ago), that was just the jist of it.

 

We did list it on the bankruptcy, but I didn't think we included it (does that make sense?). I may be wrong though, all I know is that is why we hired a lawyer so it would be done correctly, I am a rule follower to a T.  I had two CC's that I had paid off a few months before we decided to file (we had not been planning on filing at that point), and we definitely listed them to show that we weren't just running up CC's in plans to file BK. I had been hoping that my two paid off accounts would stay open to be a positive on my credit report, but of course the creditors closed them shortly after filing. One account actually shows up as a non derog and one shows up as a derog. So I thought maybe the derog one was reported incorrectly.

 

Thanks so much for the info!

Contributor
buildingitbackup
Posts: 97
Registered: ‎07-22-2011
0

Re: How to rebuild your score after a ch7 BK

Great read.


Starting Score: <600 & No Score 2/2011
Current Score EQ : 726
Current Score (TU Walmart): 676
Goal Score: 750


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Contributor
jetsfan2012
Posts: 208
Registered: ‎05-28-2012
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Re: How to rebuild your score after a ch7 BK

This is a GREAT Read and one that every person on the board looking to rebuild post BK should follow. While YMMV depending on some of the creditors listed to get(especially if you BK'd them), this is still a great blueprint. I am at 6 months post discharge, and have a few misteps, but will be resetting my habits and my timeline from now forward thanks to this board and the resources on here.

Credit Karma - 636 8-12-12 USAA
Credit Rebuilding Mode - Cap 1 Plat(500CL) SHOW MC(300CL)
Clean Up Mode - Goal - No New Apps till 6/2013
New Member
rongotti
Posts: 2
Registered: ‎08-03-2007
0

Re: HOW TO: From BK7 discharge to 700 in 24 months or less!

Great write up, question for the OP about requesting credit on a Tue or Wed at noon, I've never heard this before, what is the logic there?
Established Contributor
SoulMaster
Posts: 993
Registered: ‎11-08-2011
0

Re: HOW TO: From BK7 discharge to 700 in 24 months or less!

The logic behind it is for recon purposes. IME, the CSRs are slammed Monday from all the apps/problems over the weekend and sometimes that bleeds over in to Tuesday morning. If you app Tuesday afternoon/Wednesday, you have a better chance of getting someone live on the phone Weds/Thurs if you need them. Moreover, Mondays and Fridays are the most likely days for supervisors/csrs to "take off" due to illness/vacation/whatever. So Tuesday/Wednesday/Thursday (Wednesday in particular) would have a higher likelihood of a fully staffed call center.

Basically, it boils down to not having to wait for the recon if you need it. That's it, nothing too special.

Cheers,

-SM
(Note: NFCU is different, they recon all weekend, but their recon is them calling you if you aren't immediately approved.)
I am not an attorney and none of what I write should be construed as legal advice. For legal advice please consult an attorney.

Starting Score: ~470 preBK(8/2010)
Current Scores as of 3/15/14 All 700+. Last CR pull from a lender(housing) was mid-score 729.
Goal Score: 700+ - reached.
Established Contributor
SoulMaster
Posts: 993
Registered: ‎11-08-2011
0

Re: HOW TO: From BK7 discharge to 700 in 24 months or less!

Jetsfan-

I agree, it is most definitely YMMV. However, it should be noted that I included Orchard(and a separate HSBC card), C1 AND Barclay's in my BK and they were all approved on the timeline above.

I think what's more important (to those three) is getting all the accounts reporting as IIB. Again, YMMV!

-SM
I am not an attorney and none of what I write should be construed as legal advice. For legal advice please consult an attorney.

Starting Score: ~470 preBK(8/2010)
Current Scores as of 3/15/14 All 700+. Last CR pull from a lender(housing) was mid-score 729.
Goal Score: 700+ - reached.
Contributor
jetsfan2012
Posts: 208
Registered: ‎05-28-2012
0

Re: HOW TO: From BK7 discharge to 700 in 24 months or less!

Thanks SoulMaster for the update!

Credit Karma - 636 8-12-12 USAA
Credit Rebuilding Mode - Cap 1 Plat(500CL) SHOW MC(300CL)
Clean Up Mode - Goal - No New Apps till 6/2013
Established Contributor
2NE1
Posts: 999
Registered: ‎12-06-2011
0

Re: HOW TO: From BK7 discharge to 700 in 24 months or less!

SM,

I noticed you mentioned "If you didn't include them, the creditor most likely closed the account on their end (Account Closed by Credit Grantor), which is also a derog."

I don't have a BK but I do have a CC that was closed by the creditor due to inactivity... however, it's not showing as a derog at all. Does that only apply to BK file?

Starting Score: 486 EQ, 529 TU, 518 EX 12/6/2011 (FICOS - lender pull)
Current Score: 595 EQ SW 1/10/13 628 TU08 1/10/2013 593 EX (BoA HP) 1/5/12
Goal Score: > 620
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Established Contributor
SoulMaster
Posts: 993
Registered: ‎11-08-2011
0

Re: HOW TO: From BK7 discharge to 700 in 24 months or less!

I'm not saying it's necessarily a derog that will impact your score... however "Account Closed by Credit Grantor" raises questions during underwriting.  Specifically: "Why did the bank choose to close this?"

 

It's probably neutral impact if it was PIF and has zero lates. But when there are one or more lates and or it's not PIF, that can be a trickey question to answer and may impact anything you apply for and/or your actual score. (We all know there are a dozen FICO formulas, the ACBCG status code wouldn't be there if it didn't do something; it would simply be "Account Closed".)

 

-SM

I am not an attorney and none of what I write should be construed as legal advice. For legal advice please consult an attorney.

Starting Score: ~470 preBK(8/2010)
Current Scores as of 3/15/14 All 700+. Last CR pull from a lender(housing) was mid-score 729.
Goal Score: 700+ - reached.
Valued Contributor
Rhaeny
Posts: 1,507
Registered: ‎07-24-2011
0

Re: HOW TO: From BK7 discharge to 700 in 24 months or less!

Wish I would have read this a week ago :smileysad:.  I will be discharged shortly from a chp 13 so I am just now starting the rebuilding process.  I will implement some of the strategies you've listed for myself.  I received a pre-approved offer from Credit One Bank for a $400 limit.  I haven't recieved the card yet but after reading around here I'm wondering if I should cancel it?  The reason I ask is because I am getting a secured card from a CU with a limit of $1500 to $2000 (not yet decided) in a week or so.  Will that look not so good to have a much higher limit for one major CC than the other?  I mean is there a FICO penalty for that?  The CU reports to all 3 CRA's, doesn't report as secured and they don't require a credit check so that fit like a glove for me.  No HP to knock my scores down.

 

Secondly I recieved a credit card from WFNNB (the avenue) for $150 as well and it was a soft pull on EQ.  I actually just signed up on the website for a catalog, put a few items in my shopping cart that totalled about $40 and the next thing I knew a pre-approved offer showed up so I took it.

 

As for the strategy that you have laid out, well I IIB Capital One and Household so I don't think they will be too happy to see me coming.  So I will have to alter my strategy a bit and find another source.  I think that Barclays would be a good choice a year from now so I shall see.

 

In the meantime I will get to working on my reports because I have a few baddies that are reporting incorrectly.  Personally my goal is removal of the TL and not correction, but if I can't get removal then ultimately they need to report right.  The thing is most of the baddies are set to be removed no later than March of 2013 .  Considering that I have been in a chp 13 for 63 months now, March doesn't seem like that long at all for me.  It's amazing how much patience I have acquired over the last 5 years :smileyindifferent:


Major CC's - Barclay's ($5.5K) | Barclay's Sallie Mae MC ($5K) | DCU ($7.5K) | Discover IT ($1.4K) | Genisys Visa ($1.4K) | NFCU Visa ($22K) | Navcheck ($15K) | Chase Freedom ($5K) | SDFCU Visa ($8K) | Amex BCP ($9.5K) | Amex Delta ($10K) |Store CC's| -Amazon ($4K) | Catherines ($850) | JCP ($4K) | Macy's ($1.7K) | Avenue ($850) | Victoria's Secret ($1.4K) | Walmart ($4.1K) | Paypal SC ($1.3K) | HSN ($2.5) | Sears ($2.6K) | Sams Club ($4.1K) |Goal|: Age with grace to 750 across the board |Last app|: 3/3/2014

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