Should we be doing more, or, leave it be?

[RnJ]

Hi,

Brief history:

2003: Ch7 BK - 3-4 cc accounts, mortgage, and auto loan all IIB.  Mortgage and auto not reaffirmed, but we continue to pay mortgage, will be PIF in 2 years. Auto was PIF one month after BK filing.  These accts were always in good standing, never late, but lost the tradelines due to....

2009-2010: Disputes on IIB accounts resulted in deletion of every account. (despite having qualified attorneys working for us).  We gained some favorable points (from practically zero) on scores, but not enough and only put us with no history.  What we've done....

2010:  March: Opened one joint local bank-issued secured card - 500.
       Opened one WF bank-issued secured card for hubby - 500.
       Opened one WF bank-issued secured card for me - 500.
       All PIF monthly, all 10% util each.

2011:  August: Closed both WF secured cards.
       Opened one WF Visa non-secured for hubby - 3500.
       Opened one WF Visa non-secured for me - 1500.
       ALL PIF monthly, all only 50.00 used for each. (less than 10%  util for each)

2012:  April: Closed (joint) local bank-issued secured card.
       May: Opened one (joint) local bank-issued non-secured card - 1600.
       PIF monthly, less than 10% util.

Hubby's current TL's:
Auto account PIF 2008
PC-related PIF 2001 (only reported on one CR, likely to fall off any day).
The 2 recently closed secured cards.
The 2 recently opened non-secured cards.

My current TL's:
CC PIF 1999 (only reported on one CR, likely to fall off any day).  
The 2 recently closed secured cards.
The 2 recently opened non-secured cards. (AU on hubby's higher limit WF card).

All accounts for both of us in good standing, never late.

BK (joint) is only baddie, scheduled to fall off next April.

We each took dings for opening/closing/then opening again secured vs non-secured cards, but no other INQ's.

Current scores:

Hubby:
myFICO:
1/2011 - TU/715  
                EQ/698
1/2012 - TU/729            
                EQ/698
7/2012 - TU/729
                EQ/696
8/2012 - EX/747 (FAKO/creditsesame)

Me:
myFICO:
1/2011 - TU/727
                EQ/708
1-2012 - TU/724
                EQ/708
7/2012 - TU/707
                EQ/682
8/2012 - EX/727 (FAKO/creditsesame)

Would it be safe to assume letting the 2 cards (each) age, and the BK fall-off next spring will help?  How much of a score increase (if any at all) might we expect?  We keep our cc utilization at 10% (and even less for the higher limit cards), PIF each month, usually only one small balance reports at any given time (probably due to slightly different post dates).

We plan to apply for new mortgage in 2014, so what should or could we be doing in the meantime to improve our scores?   We do not fathom having to add an installment loan to the mix, we neither want nor need another payment, both our vehicles are in great shape, we're already paying a mortgage.  We also have no plans to ask for CL's at all if we can avoid it.

Is it possible to increase scores based only on AAoA of two (active, low-limit) credit cards each?  Or does the consensus feel an installment loan would increase the score even more? (if considered, the installment loan would only be a signature loan from local CU, around 2500.00, would most likely pay off within a year).  Again, we'd like to avoid an installment loan altogether, don't want another ding, don't want AAoA affected.

Thank you for any advice offered.

[jamie123]

Welcome to the forum!

You've really done a great job rebuilding your credit post BK!

You do have what some people would call a "thin file". You don't really have enough reporting credit. I would suggest applying for 2 more credit cards for both you and your husband. Most people on these forums agree that it takes a minimum of 3 credit cards to maximize your scores. Why that is, we don't know, but FICO scoring seems to like at least 3 credit cards.

Your scores and history should allow you to be approved from PRIME banks. From here on out you should really try building your credit using only prime banks and perhaps a Walmart card for the free TU FICO score you receive each month.

You need to read these forums to find out more information about doing a "recon". That is when you call the "backdoor" number to the lender that just denied your application to ask for a reconsideration. If you learn one thing from my post it should be "Always do a recon!". People get denied credit all the time with really great scores. Sometimes it just takes a phone call to the lender to answer a few questions to receive approval for your new credit.

This is what I would recommend:

Apply for a Walmart card. Get one card for you and one for your husband, no joint cards. When you sign up for paperless statements (pay online) you will receive a free TU FICO score each month to keep track of your score. This card is actually backed by GE credit and they are very generous with credit line increases.

Apply for 1 card each for you and your husband from one of these following prime banks:

AMEX

CitiBank

Chase

Bank of America

Discover

Wells Fargo

Barclays

If you are not approved immediately, you need to get the backdoor number from the stickies in the CREDIT CARD FORUM and call them! They might have a few questions to ask about your BK but will probably approve you seeing your BK will drop off in a year.

You really have done a great job so far. You need to take this next step and get 2 more CC for each you and your husband. Yes, you will get a ding. Yes, your AAoA will fall. Anything that happens to your scores in getting these cards will not be affecting your scores a year from now but you will then have a much better credit profile and higher scores. Inquiries only affect your score for 1 year.

You only have to make sure your credit is set and ready 6 months to 1 year before applying for a mortgage. You don't really want to apply for any NEW credit 1 year before your mortgage application.

I am not a big fan of getting an installment loan just to increase scores. I don't think it does much and why have another bill to pay. Using CCs can be just as effective IMHO and don't cost anything.

Please stop back and let us know what you decided to do.

Good luck!

[RnJ]

Hi Jamie,

Thank you so much for your response, you've managed to alleviate some of my fears (or should I say apprehension).

I was thinking to start, perhaps the AMEX zync, simply due to our current short history, keep it at 10% or less as we're doing with the rest. (or maybe biting the bullet and applying for both zync and green at the same time?  If denied one, might have chance for the other?)

Yes, we definitely would not be applying for additional credit for a lengthy period before mortgage shopping.  We have a good and long working relationship with our local bank, local CU and WF (we have a WF card as well as checking/savings there and the other two), so we're fortunate in that respect that they have everything they need beyond the FICO's.

Thanks for your opinion about the installment loan, I feel more relieved, I truly did not want to have to go that route!

[jamie123]

I think AMEX Zync would be a great choice. Don't forget to do a recon unless you are immediately approved. If you get the 7 to 10 day message, call them!

You are misunderstanding the less than 9% utilization rule. What you are doing works, but you can use your credit card as much as you want, you just need to go online and pay the balance down at least twice a month. It is the REPORTING BALANCE you need to be concerned with. There are a lot of threads here concerning this topic, you need to research this. The only time you need to do this is if you are applying for NEW credit within the next month. It is how you maximize your scores to their fullest.

So, go get that AMEX Zync card! Don't forget about getting the Walmart card also. No joint accounts.

Stop back and let us know how your app spree turns out! Interested parties want to know!

Good luck!

[RnJ]

Jamie, thanks so much.

I understand how utilization and report balances work and actually anytime this week would be a good minimal app spree, LOL.

We've had our CU and another bank have data compromises, so I'm distrustful of online banking, plus bank fees to do so.  I realize my data is out there for god-knows-who to find no matter what, but if I can prevent it on my side, all the better.

Sorry, not trying to be a party pooper    You've given me some sound advice and I truly thank you for that!

Btw, I've been reading here, it looks like AMEX isn't always friendy with a BK reporting.   Guess I won't know til I try!

[jamie123]

That's the kind of attitude to have!

I GUARANTEE you won't get that card unless you apply for it!

Good luck and let me know how it turns out!