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Established Member
theoutsider
Posts: 12
Registered: ‎08-13-2008

Mortgage after Chapter 13 Discharge

Here's my situation.  My FICO scores are as follows as of 11/27/08 ( Before my Chapter 13 Discharge)

 

EQ-672

TU-575

EX- MyFICO said that there was not enough info. to come up with a score

 

My discharge was 12/4/08.  I just got approved for a Orchard Bank Classic Master Card with a $750 limit.  From what I gathered from this forum, I needed to re-establishe my credit since I had closed most of my accounts back in 2004.  I do have an auto loan which I made my first regular payment in November after completing Chapter 13 plan.  My wife and I are going to a Mortgage Company in a coupe of weeks to see if we prequalify for the USDA Guaranteed Loan Program.  Our current household income, including $9600/year in child support is around $80,000.  We live in North Carolina and are both teachers, I've been at the same school for 20 years.  My wife has been at her school for 4 years.  I'm not sure of her credit score.  We know that we cannot apply for the USDA loan until after !/20/09 when the income limits are supposed to increase.  First, I know that I need to get our "middle" credit score up to 620 in order for the USDA to ignore my Chapter 13.  I also know that my wife has 3 credit cards that are above 50% utilization.  We plan on paying those down right after the New Year.  My question are:

 

1) Will my new credit card help with giving me  an "Experian" FICO score?

2) Will my auto loan start helping my credit score now that it is out of Chapter 13?

3) If I don't get "3 FICO" scores, why is the Transunion FICO so much lower than my EquifaxFICO?  On my credit summary with Transunion, it says that I have a missed payment 1 month ago, but my Transunion credit report shows nothing to this effect.  The specialist at MYFICO really could not give me reason for this.

 

Well, sorry for the lengthy post, but I've worked hard the past 4 years while in Chapter 13 to discipline myself and am really looking forward to getting my family of 5 into a home sometime in 2009.

Established Contributor
granny031350
Posts: 951
Registered: ‎12-04-2007

Re: Mortgage after Chapter 13 Discharge

I believe the key will be if you have at least 2 or 3 or 4 tradelines that have reported positive since your bk filing.  I don't think your car will report as it was "included" and as a result, becomes "discharged" even though it really wasn't. 

 

The 620 is key also for the USDA.  My chapter 13 was just closed.  However my discharge won't happen until sometime late Feb/March.   I am in your boat as well and hoping to be able to apply in March. 

 

I don't qualify for the USDA loan but was looking at the MSHDA (Michigan) and/or FHA.

 

As to the TU, they look at the status date and your recent discharge, although not a new negative, makes it look like one was added.  The FICO formula only goes by dates etc, it cannot "see" that it was only updating a previous account.  I have the same situation with TU claiming that I have lates when I haven't had anything since 2005.  It is just the updating of the BK.

 

It will take about 6 months for the credit card to help you generate a Fico score at Experian.  Do you have it locked or something for it not to be reporting?

Established Member
theoutsider
Posts: 12
Registered: ‎08-13-2008

Re: Mortgage after Chapter 13 Discharge

Well, first of all I just received the approval on the credit card today.  I don't know what you mean by locked?  I I guess Experian has not had enough recent info on me to tabulate a score with FICO.  I do get a FAKO score at the Experian site though.  As for Transunion viewing the status of my discharge.  The only company to have my discharge listed is Equifax which by the way.  My Equifax FAKO score is 70 points lower than my Equifax FICO score.  Why?  Also, my bank told me that my car payments would start being reported to the Credit Bureaus since I still owe about 1 1/2 years on the loan.  I guess that along with the new credit card would give me 2 "tradelines". 
Established Contributor
rmily
Posts: 670
Registered: ‎07-12-2008

Re: Mortgage after Chapter 13 Discharge


theoutsider wrote:
My Equifax FAKO score is 70 points lower than my Equifax FICO score.  Why?

 

Completely ignore your FAKO scores.  They can go up when your FICO scores go down, or go down when your FICO scores go up.  Some of them even use different scales besides using different logic to calculate your score.  Some people have reported variances of 100 points.  No lenders we know of use them.  I think it's a dirty trick that they even sell those things in my humble opinion :smileyhappy: 

Established Member
theoutsider
Posts: 12
Registered: ‎08-13-2008

Re: Mortgage after Chapter 13 Discharge

Well, I guess what I really need is to get my Transunion score up to 620 or get Experian to post a FICO score for me.  Will the fact that I've just opened a new credit card account help with the Experian non-score?  Also, If I do get to a middle FICO of 620 shuold I be OK with the USDA?  From what I understand they will overlook my Chapter 13.
Frequent Contributor
steelfan
Posts: 473
Registered: ‎03-06-2007

Re: Mortgage after Chapter 13 Discharge

Have you looked into a fha loan.  You can use non traditional credit like cellphone bills, rent, utilities etc.  Just get records that you have paid on time for atleast a year.
Established Member
theoutsider
Posts: 12
Registered: ‎08-13-2008

Re: Mortgage after Chapter 13 Discharge

Steelfan,

 

Our problem would be with the down payment.  My wife and I have been paying off debt i.e. Chapter 13 and her cards.  Of course, I guess if we qualified we could get the $7500 tax credit.  To be honest, I really think the USDA program is best for us if we can just get to the 620 middle score level.  Anyone have advice?

Established Contributor
rmily
Posts: 670
Registered: ‎07-12-2008

Re: Mortgage after Chapter 13 Discharge


theoutsider wrote:

To be honest, I really think the USDA program is best for us if we can just get to the 620 middle score level.  Anyone have advice?


On the credit report you buy here, the second page has a scale thingy that shows what is helping your score and what is hurting your score.  Check those out and see what you can do about them. 

 

If you didn't currently have an open credit card, maybe you'll see a boost when your Orchard card starts reporting.  Treat it well.  Most people report the best scores when they have a balance of 1-9% when the statement closes.  With a small credit limit that doesn't give you much room, so I would suggest paying your balance down to $60 or so immediately after making a purchase and paying the last $60 or so after you get the statement.

 

Also check your wife's scores if she will be on the loan.  I believe they use the lower of the two people's mid-scores.

 

Lastly, you might check on another board why you aren't getting an Experian score.  Maybe the Understanding FICO scoring or something.  My three thoughts are below - don't bank on them as I'm no expert but maybe a starting point..

1) you put a freeze on it so no one can check your Experian credit

2) you don't have any accounts reporting their status to Experian (sounds unlikely if you have a car loan now and a number of accounts in 2004, even if closed should still be reported)

3) Somehow they aren't matching up your information correctly so when you request your score, it is there but they can't find it and link it to you


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