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

New Member

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

Thanks Steeler - I will wait a couple more months.

New Visitor

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

Hello All,

 

I'm looking for some guidance as I am trying to follow this plan but there are a couple of issues that may dictate a slightly different path. I was discharged from CH7 in late April.

 

1. Some of the debt that I had was some student loans in which some were defaulted. 3 of the 4 student loans I have consolidated and while the first payment isn't due yet, the new consolidation loan is showing current and paid as agreed. 1 of the 4 (which I attempted to consolidate as well) sent their's directly to another collection agency post BK. I was well aware and never expected that these would be included in BK which is why I consolidated immediately after being discharged. It was a smaller balance ~$700 that I have made arrangements with the agency to pay.  The other 3 after consolidation show a balance of ~$12K and again, show current.  My question related to this is being that this is a loan on my credit, should I follow step 2 with the credit builder loan? I'm afraid that due to the 2 loans already listed, it would be extremely hard to get approved. Also, am I serving the same purpose if I can get the collection account resolved and continue to pay the consolidation loan as agreed.?

 

2. According to step 1 in rebuilding, I applied for a Credit One card in mid May but was declined. This again may have been because of the student loans. Just a couple of weeks ago, I received a prequalifier for a Capital One Platinum Mastercard (unsecure). I reluctantly applied and was approved. Not secured, no AF. According to the steps, I should have applied for Cap One 2nd about 5 months into the rebuild. Being that it didn't play out that way, should I just roll with the Cap One card as is and get the CLI while using little utilization until step 7 or apply for a different card as a 2nd card inplace of the Cap One option?

Valued Contributor

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

Hi ALGuy! Welcome. ☺

1. Your student loan is counted as an installment loan just like a share secured loan would be. No need to get an SSL at all.

2. If you got approved for Cap1, just skip Credit One altogether, you don't need them! Use your Cap1 for small purchases, pay in full each month, pay your student loan each month, and your scores will go up. Especially once the collection is paid off.

Once your scores go up, say into mid 600's, go for Discover or Barclays. Six months after your Cap1 you could apply for a second Cap1, grow them both, then combine.

Good luck! I'm looking forward to seeing your journey! ☺
Current Scores------ EQ 681; TU 650; EX 687 FICO 08--- Gardening from 09/07/17 until "Winter is Over"
Beginning Scores-- EQ 632; TU 576; EX 619 FICO 08 (06/13/16) - BK7 discharged 11/2015

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Established Contributor

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


ALGuy wrote:

Hello All,

 

I'm looking for some guidance as I am trying to follow this plan but there are a couple of issues that may dictate a slightly different path. I was discharged from CH7 in late April.

 

1. Some of the debt that I had was some student loans in which some were defaulted. 3 of the 4 student loans I have consolidated and while the first payment isn't due yet, the new consolidation loan is showing current and paid as agreed. 1 of the 4 (which I attempted to consolidate as well) sent their's directly to another collection agency post BK. I was well aware and never expected that these would be included in BK which is why I consolidated immediately after being discharged. It was a smaller balance ~$700 that I have made arrangements with the agency to pay.  The other 3 after consolidation show a balance of ~$12K and again, show current.  My question related to this is being that this is a loan on my credit, should I follow step 2 with the credit builder loan? I'm afraid that due to the 2 loans already listed, it would be extremely hard to get approved. Also, am I serving the same purpose if I can get the collection account resolved and continue to pay the consolidation loan as agreed.?

 

2. According to step 1 in rebuilding, I applied for a Credit One card in mid May but was declined. This again may have been because of the student loans. Just a couple of weeks ago, I received a prequalifier for a Capital One Platinum Mastercard (unsecure). I reluctantly applied and was approved. Not secured, no AF. According to the steps, I should have applied for Cap One 2nd about 5 months into the rebuild. Being that it didn't play out that way, should I just roll with the Cap One card as is and get the CLI while using little utilization until step 7 or apply for a different card as a 2nd card inplace of the Cap One option?


ALguy,

 

Welcome!

 

With regards to your student loans,  I would do everything possible to get that $700 loan paid to zero. It will will help your CR showing that you have a paid in full account. On your consolidation loan, check your payment history monthly. Make sure that your monthly payment is covering all the interest and some of it bringing the principal down. I would not worry about getting a secured loan. The purpose is to create another positive trade with prefect payment history on your CR. You're going to be able to that with your student loan.  

 

Since you were lucky to get a Capital One unsecured card, you're really in better shape that you think. Just remember to let the statement cut with the balance reporting no more than 10% and remember to pay in full. I would also sign up and use the CapitalOne Credit wise. I like it a lot.  Once you get that $700 loan paid off and you get your scores near 650, you can apply for a Barclays card or Discover.  If you get a preapproval for a decent sub-prime card like Merrimack Bank, then I would consider that only. Just give it time.

 

Now that you are in a decent place and need time to create a paerfect payment history, I would join a credit union that is bankruptcy friend and create an emergency fund that will prevent you from ever repeating what cause your bankruptcy.

 

Best of luck in your rebuild.

 

Guyatthebeach

Regular Contributor

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

I would just like to add that due to the wealth of knowledge and support that I received from all of the wonderful contributors of this forum, my latest fico score is 682! My BK 7 will have its 2 year anniversary in December of this year! I am forever grateful! Oh and NFCU gave me a cli to 20k! I'm beyond ecstatic! Thanks everyone!!
Community Leader
Senior Contributor

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


New_beginning0715 wrote:
I would just like to add that due to the wealth of knowledge and support that I received from all of the wonderful contributors of this forum, my latest fico score is 682! My BK 7 will have its 2 year anniversary in December of this year! I am forever grateful! Oh and NFCU gave me a cli to 20k! I'm beyond ecstatic! Thanks everyone!!

Booooooom! Congrats on the score and the amazing credit limit with NFCU Smiley Happy

Filed BK7: 7/2012 (start score EQ 560 / TU 529) Discharge 10/2012
730 EQ FICO 11/2017
750 TU FICO 11/2017
735 EX FICO 11/2017
$20k NFCU Platinum | $25k NFCU cashRewards Sig | $15k NavChek | $7.1k Cap1 Quicksilver | $10k Amazon Store | $19k Cap1 VentureOne | $16k Barclay Aviator | $5k Chase Freedom | $5k Chase Sapphire Preferred | $9k Costco Visa | $20k AMEX BCE
Established Contributor

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

That's excellent news! Congratulations on your hard work! Keep it going!

guyatthebeach
New Visitor

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

Just starting my CH 7 process, I love the idea of this step by step rebuilding process.  Im curious about the credit builder loan.  Im coming out reaffirming my car loan which has 3 years left.  Should I still do the credit builder loan, or would the reaffirmed car loan work in its place?  Thank you.

Established Contributor

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

@Akumahito, the car loan should work just fine. Just make sure it is still updating on your reports.
Regular Contributor

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

Thanks Scupra for all your help and info!!!