Hi everyone,
I am new to the forum so please forgive me if this is a repeat. Based on posts that I have read it sounds like a lot of people have written Good will letters regarding their bankruptcies. I believe the GW letter would remove the negative tradelines from the credit report. Does this improve your score even if those tradelines were included in bankruptcy? How successful would that be? I have about 10 accounts included in the bankruptcy, if I could have 2 completely removed would that improve my score? I am currently at 533 and hoping to get to 640 over the next 6 months.
Here's my snap shot.
Ch 7 discharged 8/31/2011
--2 capital one cards show IIB
--2 First Premier cards show IIB
--IKEA (GEMB) IIB
--HSBC shows legally paid in full for less than what's owed 2006
--HSBC IIB
--US Bank charge off IIB
--Kroger MC not showing IIB (they sold to US Bank before I filed) Can I get this to show IIB? They are listed as the original creditor in my BK filing
--Web Bank (old CC) I actually paid their collection company years ago but this still reports as a charge off. I sent a GW letter to see if they will just delete this item. If not I think it falls off in 2013.
--Student loan show 1 late pay 30 days in 2007. Current balance is $0. I asked that they remove the late pay. Sent a GW letter.
--Student loan 6 120+ late pays in 2007. Current balance $0. Sent a GW letter to ask they update these to paid on time (loan should have been in forbearance)
--3 other student loans all in good status
--US Department of Ed loan in good status (deferment)
--DTE, not showing IIB yet. Hopefully they'll update this in October.
--DTE, new account current
Any ideas or suggestions as to where to start would be great. My goal is to get to 720 in about 18 months. How long should I wait before trying to obtain a secured card? Since I had Cap 1 and HSBC in the bankruptcy odds are I won't be able to get those for secured cards. Any other suggestions?
Thanks in advance!
Starting Score: 533 (BK Ch7 discharge 8/2011
Hi fdholmes1,
Welcome!
Just as filing a BK drops your FICO score significantly, you're likely to see some FICO increases as you age away from your filing date. In other words, there seems to be some FICO difference between filing recently and filing some time ago. My FICO's were in the 500's after filing CH 13 BK in '05. In '09, they were in the 650's. After a bit more time, fixing inaccurate reporting and goodwills, they are currently in the low 700's. My filing date was 2005 meaning I'm six years post filing (2 years post discharge) - so time has been part of the process.
As far as the accounts that are not currently stating IIB on your CR's (Kroger and DTE, right?), what are the current reporting statuses on those accounts? Are they reporting paid as agreed? Zero balances? Or are they reporting balances due?
The goal in goodwilling accounts is to have the negative aspects removed from the tradeline but maintain the tradeline itself. That's because baddies i.e. 30 days late, 90 days late, IIB etc. are reported for seven years but the account itself will generally remain on your report for ten years after its closed. That gives you 3 years of clean reporting along with the age of the account - which is a plus for you.
One of the secrets to rebuilding after BK is to look long-term. If you can goodwill the lates or the IIB's and maintain the account itself, it will help you out down the road. I was a few years out from filing before I goodwilled, and I had paid the accounts through the BK itself. Some of the accounts I goodwilled did stop reporting the account altogether, others simply removed the IIB notation. Other folks on the forums who goodwilled earlier might chime in.
Looking at your list, it appears that you have no open credit cards? (Sorry - I'm not familiar with DTE, so I don't know what type of account that is). If that's the case, opening a credit card as you mentioned (secured or unsecured) will give you some significant FICO points (typically somewhere around 20 if its a bank card), so that's a great plan. Cap One is known for working with folks who've included them in BK, but they won't touch others, so that's a YMMV thing. And again, length of time since filing can be something of an issue.
Is there a reason you're looking for a 640 FICO? Hopefully some folks will chime in regarding whether they were able to see this significant of a score increase within six months from filing. For me, it took longer. But all good efforts at rebuilding are definitely worth it and the right thing to do. And I have to note that we were able to be approved for a mortgage refi in 05 with our FICO scores in the 500's - so it's not as if life is on hold until your FICO scores are up to the 700's. Just don't want you to feel as overwhelmed as I did at that point. Even with scores in the 700's, there are some doors that remain closed because of a BK - but there are plenty of doors that are open and lots of options for folks who do have a BK on their report. Glass half-full! 
And, if I might suggest, don't overly obsess about FICO scores when you're rebuilding post-BK. BK in and of itself is a huge stress - and a relief. It's going to produce a FICO score hit to some degree as long as its on the credit report - there's just no way around it. Remember it diminishes with time and with "goodies" being added on your report to balance out the "baddies" and (IMO and IME) with "baddies" goodwilled whenever possible. Do your best to rebuild going forward and do what's right and sound financially. Let time be your friend. The FICO's will come back up. Hang around these forums and do whatever you can, but don't fret over the parts that you can't change. I'm glad for where my FICO's currently are, and I'm very glad to have learned what these forums have taught me, but my daily life is focused on a good many other things. Keep it all in perspective. 
@Anonymous wrote:Hi fdholmes1,
Welcome!
Just as filing a BK drops your FICO score significantly, you're likely to see some FICO increases as you age away from your filing date. In other words, there seems to be some FICO difference between filing recently and filing some time ago. My FICO's were in the 500's after filing CH 13 BK in '05. In '09, they were in the 650's. After a bit more time, fixing inaccurate reporting and goodwills, they are currently in the low 700's. My filing date was 2005 meaning I'm six years post filing (2 years post discharge) - so time has been part of the process.
As far as the accounts that are not currently stating IIB on your CR's (Kroger and DTE, right?), what are the current reporting statuses on those accounts? Are they reporting paid as agreed? Zero balances? Or are they reporting balances due?
The goal in goodwilling accounts is to have the negative aspects removed from the tradeline but maintain the tradeline itself. That's because baddies i.e. 30 days late, 90 days late, IIB etc. are reported for seven years but the account itself will generally remain on your report for ten years after its closed. That gives you 3 years of clean reporting along with the age of the account - which is a plus for you.
One of the secrets to rebuilding after BK is to look long-term. If you can goodwill the lates or the IIB's and maintain the account itself, it will help you out down the road. I was a few years out from filing before I goodwilled, and I had paid the accounts through the BK itself. Some of the accounts I goodwilled did stop reporting the account altogether, others simply removed the IIB notation. Other folks on the forums who goodwilled earlier might chime in.
Looking at your list, it appears that you have no open credit cards? (Sorry - I'm not familiar with DTE, so I don't know what type of account that is). If that's the case, opening a credit card as you mentioned (secured or unsecured) will give you some significant FICO points (typically somewhere around 20 if its a bank card), so that's a great plan. Cap One is known for working with folks who've included them in BK, but they won't touch others, so that's a YMMV thing. And again, length of time since filing can be something of an issue.
Is there a reason you're looking for a 640 FICO? Hopefully some folks will chime in regarding whether they were able to see this significant of a score increase within six months from filing. For me, it took longer. But all good efforts at rebuilding are definitely worth it and the right thing to do. And I have to note that we were able to be approved for a mortgage refi in 05 with our FICO scores in the 500's - so it's not as if life is on hold until your FICO scores are up to the 700's. Just don't want you to feel as overwhelmed as I did at that point. Even with scores in the 700's, there are some doors that remain closed because of a BK - but there are plenty of doors that are open and lots of options for folks who do have a BK on their report. Glass half-full!
And, if I might suggest, don't overly obsess about FICO scores when you're rebuilding post-BK. BK in and of itself is a huge stress - and a relief. It's going to produce a FICO score hit to some degree as long as its on the credit report - there's just no way around it. Remember it diminishes with time and with "goodies" being added on your report to balance out the "baddies" and (IMO and IME) with "baddies" goodwilled whenever possible. Do your best to rebuild going forward and do what's right and sound financially. Let time be your friend. The FICO's will come back up. Hang around these forums and do whatever you can, but don't fret over the parts that you can't change. I'm glad for where my FICO's currently are, and I'm very glad to have learned what these forums have taught me, but my daily life is focused on a good many other things. Keep it all in perspective.
Stricktly awsome post and advice ....