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Posts: 93
Registered: ‎06-02-2008
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Brand new to the boards....seeking advice please!

Hello everyone. I am really glad I have found these boards! They have given me a new insight into the mess that I call our family's credit. If only I found these boards 8 years ago.

Ok, so here goes our (me and wife) sad story... I had a good job, then entire department got blind sided at the end of 06. We were all told on a Wednesday that our last day would be on Friday! Even the management was let go. I tried to find another job with same pay but no dice. Within 6 months we were late on just about every bill we had except for rent (made sure fist we had a place to live). Both cars were in danger of being repossessed. So, we decided to declare bankruptcy chapter 7.

The bankruptcy was discharged 11/07. I wound up turning in one of our cars back to the finance company to avoid having 2 car payments after bankruptcy. I filed a reaffirmation agreement with Ford Motor Credit to keep our minivan. The reaffirmation was denied by the bankruptcy court. Ford Motor Credit is allowing us to keep the van as long as we continue to make the payments on it, but they said that they will not report it to the credit bureaus anymore. We left the apartment and moved in with my wife's grandmother to try and save as much money as possible.

Since all this has happened, this is what we have done so far. We have opened up a new checking and saving account with a local credit union (dec 07). About six weeks ago me and the wife pulled all of our credit reports and disputed a bunch of inaccurate information (a lot of the pre-bankruptcy debt was listed as charge off with account balances still on them. It appears that everything there has been cleared up. I will pull our credit again to double check to make sure everything says included in bankruptcy with $0 balance.

So, for the past 7 months we have been on a cash only diet, if we don't have money for it, we don't need it. However, after reading these boards a bit, I see that cash only is a bad idea. I have no idea what my fico scores are (I know mine used to be in the 680-710 range). I used the free annual credit reports to get our copies of our credit. The only bills we have now are the van payment, and our car insurance (we do help grand mom with her utility bills and food and such).

Now the road is open before me. I want to make all the right choices to get us to the good credit destination down the road. I would like not to make any wrong turns in our en devour getting there. Any and all good advice is welcome! I have no idea where to start. I know this post was long, but I appreciate everyone who reads it and responds. Thank you!!
Valued Contributor
Posts: 2,374
Registered: ‎03-15-2007
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Re: Brand new to the boards....seeking advice please!

What I would do first of all is research FICO scoring, here on these boards and on my Web site linked below.

Use the links to order your FICO score. You need your score so you know where you stand. I think you're probably a bit scared to see it now, which is understandable. But even if it's horribly low, look at it this dropped The Big One, the BK, the Bomb, the King of Reds as I call it on my Web site. So you're as low as you're going to get, barring the random wobbles that FICO scores seem to undergo. It's all uphill from here.

After you have your score, the first step to recovery is getting some revolving credit accounts that will report as positives to potential creditors and the FICO scoring system. Right now, your biggest problem is that your credit report lists everything you did WRONG (the bankruptcy) but probably little to nothing of what you've done RIGHT.

You probably will have to settle for low limit/high fee cards, with this recent bankruptcy, but you're not getting the cards for the limits. Charge something small--like a #3 combo at McDonalds--let it report, and pay it off on time.

Don't expect any immediate improvement in your FICO score. Generally in the first year after bankruptcy, the scoring system will disregard anything positive you do. So if you're at a 560 now and you're still at 564 at the end of the year, don't give up. Keep on keeping on, because if you get a couple revolving accounts and keep paying them on time, in 2009 your FICO score will begin to recover. Once you get back into the 600s, you should be able to get another revolving account with more reasonable terms.

You can't undo the past, but you CAN do a better future.
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in a credit-scoring postnuclear Stone Age...

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