Rebuilding after a BK Chpt 7

[Anonymous]

Hello all,

First let me say that I've been reading these forums, and have found a lot of good information on them.  I just wanted to ask the guru's some questions on regards to my specific situation.

I filed for BK Chp 7 in Aug 05 and got it discharged on 02/06.  This brought down my Experian FICO score and it's currently at 584 (haven't checked the other 2).  I have the following credit cards in good standing (were not included in BK)

Capital one - CL=$1050 - Balance=$750 APR: 19.8% (Was late 30 days in Jun 06) Joint with my dad.

Chase CC - CL=$100 (account is currently closed) Balance=$1481 APR:12% - Never late.

Gas card = CL=$300 Balance=$0  (never use it, don't know where it is actually)

Autoloan - Balance=$12,150 APR 9.95% - Good standing never late  (Had it since 03/05)

I just recently applied and was approved for a HSBC Platinum card with a CL of $750 and a fixed APR of 14.95%.  (looking for lower interest to do a BT)

What would be a good way to bring my score up in the shortest amount of time?  Would paying off my Chase card first (since the CL is only $100, but balance is way higher)  be the most effective way?  Should I try and apply for more credit?  How long until the BK starts to make a less impact on the score, a few more years? 

Thanks in advance for any suggestions/tips.

-d

[Anonymous]

Hi d,

Your score is pretty decent, even with the bankruptcy. 

It's hard to say when a score will go up and how much.   Here are some things that you can do that may help your score:

• Pay down the Capital One card until it's at 1-9% utilization (balance of between $10 - $90).  Better yet, if you can, pay off the balance but don't close the card.
• Write a GW letter to Capital One to see if they'll remove the late entry in June 06 from your report.
• Keep the balance down on the HSBC card.  Better yet, don't use it.
• I'm confused about the Chase CC - do you have a $100 credit limit and a $1481 balance, or is it supposed to be something else?  If it's how I thought that I read it, pay this off ASAP.  This is hurting your score.
• See if you can re-open your Chase account after it's been paid way down or paid off.
• You could apply for more credit, but it may negatively affect your score in the short term.  Applying for too much credit in a short period of time makes the CRAs think that you are in financial trouble.
• Keep paying your bills on time.

[Anonymous]

Thanks for the tips.  I will be paying off both the Chase and CapitalOne cards by the end of the year.

I went and signed up for Truecredit and pulled my 3 scores, and found they are not as low as I thought:

TU - 623

EX - 556 ??

EQ - 640

I'm not sure why Experian is so low.  I looked up the credit reports and there's nothing different on that one.  Should I worry about this?  Which one should I use as a guide? 

Thanks again.

-d

[haulingthescoreup]

The scores you get off of TrueCredit are not true FICO scores. Many people call them FAKO scores. You will need to cough up $ on a myFICO site for the scores that your lenders will look at. But it is handy to get your credit reports off of TrueCredit for a reasonable price.

I use TrueCredit to get reports, and FICO/ ScoreWatch to get genuine FICO scores. I only wish that my FICO scores were as high as the ones that I get on TrueCredit!

There are some great threads on these forums to read when you're starting out. You might try this one first:
http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=2654,

[Anonymous]

Thanks again for the information. I went ahead and got my true FICO from myFICO, and it is currently at 580 (big difference compared to TrueCredit.com)

I was thinking about paying off my credit cards quickly (within 6 months), but using the FICO Score Simulator, I get:

"Best Action - Pay Down 90%-100% of Your Credit Card Balances - Over the Next 24 Months"

It does not take into account my auto loan, is this not considered to calculate the score? I know this will probably be considered by future car loan applications, but you would think that paying off $12K of debt earlier would have some positive impact on the score.

Thanks -d

Message Edited by onehotcuban on 09-20-2007 09:01 PM

[Anonymous]

Just curious - How did you not include those in your BK? One has to include ALL debt in a BK. I'm really surprised you were allowed not to include those - and/or that the CC didn't automatically close the accounts when you filed, whether they were listed or not. I filed in '04, and had to list everything.

The car loan could have been reaffirmed, but my understanding is that by law, all unsecured debt must be listed.

[Anonymous]

Well, the CapitalOne card is a joint account with my dad, so I didn't want it to show on his report as being dischard in BK.  The Chase card was after the BK.  When I submitted my paperwork, my attorney said that I could choose which accounts to include, but that the bank could automatically close the accounts once the BK was filed.  Fortunately, they didn't close it.  And yes, the auto loan was reaffirmed, since it had never been late and I was told it would help me rebuild credit afterwards.  BTW, my reason for filing was because my wife had over 15 CC maxed out and it was recommended by the lawyer that we did a joint filling.  I actually only included 2 cards on the BK. 

[Anonymous]

Yes you can keep acounts when filing BK. But those creditors are apt to take adverse action once it hits your reports.

[Anonymous]

Interesting... not what I was told, but possible my attorney just thought it better to go completely clean, rather than await fallout from those who weren't listed.

BK has lots of details - seems people hear different things, and/or have completely different experiences with it. Somewhere in all that is the truth, eh? Thanks Brammy.

[VLGaffEsq]

The best friend you have towards improving your FICO scores after your bankruptcy, short of keeping your credit card balances down to a bare minimum, is the passage of time.  Wait another 6 months and then try to get CLI on your current cards and try to get maybe one more.  Above all, NEVER pay any of your cards or bills late.  Your bankruptcy filing, unfortunately, will remain on your 3 credit reports for the next ten years, but it will affect you less and less and time passes.  I would suggest you may want to join a local credit union to cultivate a business relationship there (since they may be more understanding of your past) and they have lower rates for loans.  Good luck to you!