When I came out of my BK, I got a Secured credit card.
Best Cards; Orchard bank or New Millennium;
My Score went form insufficient to 300 to 425 to 510. You may say that's low but this happen within 6 months with TWO cards. If I would have gotten other rebuilding tools it would of been higher. I wasn't trying to see any bills AFTER my Chapter 7.
If you use them keep it at 30% usage or pay it off every month. The budget & plan I'm on now will have me debt free within 5 months and credit items reporting 0 zero usage on my credit cards boosting my score up 80 to 150 points by year end.(TO BUY MY HOUSE) Six months is enough time to build credit back up, trust me I know! Not by a 100 points a months but within 6 months saying your score was 400 you can be at 600 or more.
You say no way? This is how.
As I said after my chapter 7 I got myself a secured credit card, My first limit was $300. Every pay check I took $400 (One time I put a $1000 on it) and put it on the card to increase my limit. New M, allows you to get two cards at the same time that can be at a Max of $5000 each. So if you are right out of bankruptcy and have two cards reporting $4000 and $4900 WHAT DO YOU THINK IS GOING TO HAPPEN? NOTHING BUT POSITIVE INFO BOOTING YOUR SCORE!
Some say I can not put that amount of money on a card its to much. Well Yes you can! Here's how!
(1)
Say that you have a phone bill to pay that's $100 that you're going to pay anyway from your checking account. If you have your Secured card PUT that $100 dollars on the card and pay it form there. That will increase your limit while adding activity on the card. And when the bill comes 25 days later and that $100 is the balance as I said every extra dime I had I placed on my card and I'm sure you will have extra as well.(Movie money, dinner etc.) that pays the balance. And remember its 25 days later which you can repeat this process over and over again by putting $100 on the card YOUR first (1st) check paying it off by the third (3) check so in between check 1 & 3 is check (2) which you and add month to the card as well, THE MONEY GOES INTO A SAVING ACCOUNT (This IS a 30 to 45 days method) Therefore increasing your limit!
This method is working NOW for me as I write this and as you can see my scores are listed at the bottom they are growing and growing all right after filing BK.
(2)
You can also put $50 on it and pay the cc when it come with the other $50, leaving a zero balance at months end also growing you limit amount & activity.
My debt now is mine and my wife's(hers really)
If you don't understand this method reply or send me a email and I will give you step by step of what I'm doing. This is good for rebuilding as well.
ON MY WAY TO BEING DEBT FREE AND JOINING THE 700 CLUB!
8-14-09 TU 562 myfico, EX 541 my fico, EP 578 (Vantage Score)
Current debt is $7500 within 9 accounts on my credit file.
Starting Score: 300 TU 300 EX
Good day,
I came across your story in the forum. I filed BK a few weeks ago. I am excited to finally be rid of the headache that has been making me nuts. I am 32yrs old and I ruined my credit as a young adult. Finally I am able to start fresh. I am looking forward to moving in a positive direction and I want to take the right steps to increasing my score almost immediately after discharge.
My score is currently 517. I am sure that will drop after discharge, but I do not know by how much. Would you mind giving me a severe break down on what you did to get your train back on the track? The only bills I am responsible for is a student loan that I am current on since 2008 and a car note that I have been paying on since 2007, never late on either.
Please help me......
Thanks :-)
No problem, its not over at all!
Did you file Chapter 7?
I went from a credit score of insufficient to 300 to 410 to 500 now around 680 and I will be way over 700 by year end right after bankruptcy and here's how. One thing I never knew is why I had a score of insufficient but that's the past. You have to think of it as a fresh start and nothing more, anything you want put it on hold until you reach that 650 mark or more. Since all of your bills are gone except the ones you mentioned that's great. Now its time for the rebuilding process! I don't know if you own a home or have any credit cards but I will still give my direction of rebuilding I took. Your score of 517 may not change that much or any at all, the creditors really don't report any more after receiving the BK papers and what goes on your credit is just that, ACCOUNT INCLUDED IN BK and balances at zero. If the BK is already on your report I'm thinking that 517 is where you're going to stand. Lets hope! Mine did. If you're lucky to have your score stand at 517 you're not far from having a good score again within months. Some put rebuilding 6 month to a year and I agree if it doesn't stand you can expect a 100 point drop!!
But lets start!
As mentioned in the blog I went with New Millennium & Orchard Bank. I have 2 cards with NM and 4 with Orchard Bank. My OB cards I had while I was in BK but didn't place them in my Bk so I'm thinking your car loan wasn't in BK? My New M cards are the ones that got me over and reported great. Something came over me when I was faced with paying on New M and paying on a bill. I knew by reading on forums like this that its about the available credit, low utilization and on time payments that sends your score up. I started out with the $300 min to open the card and from there when ever I got paid I put money on the card to increase my credit line and activity within the card. New M allows you to send the deposit via money gram to pay the bill and to increase the limit. So what I did was every pay period I placed $100 to $1000 on the card and any bill I had to pay I paid via the card. Sending the money via money gram posted on the card the same day or the next business day. Lets say you get paid on the 1st. I placed $300 (already having a $300 opening limit) on the card I had to pay in bills and on the 5th I paid them with the card, leaving $300 open and utilization of 50%. Now you have a bill on the card for $300 so by the next pay period I paid the $300 off now I'm back at $600. The next pay period I put another $300 or more on the card. Giving me a starting $300 limit within a month to $900. The report in Jan shows you have a $300 limit, the report in Feb.. Will be $900 and so on and so on. Yes you're paying to have a credit line but what can you do, unlike most secured cards these cards don't report it as secured. Why I say that is I came across lenders that didn't agree with secured cards and paying for credit but don't worry its not many. When I came up with this, I said its nothing more then bill money that you're going to spend anyway and it can help with my credit. Most companies take CC for payment the ones that don't I used a cash advance from the card and put it into my Bank(For a check) and paid thru there.
Feb.. $900 limit, (based on $300 increases and payments with two pay periods a month) by the end of March $1200, April $1500, May $1800 this was my own credit line increases I controlled. Just imagine putting more, I was at $5000 with one card in 3 months and my debt was wiped out with the BK and all I had was my credit cards reporting this amazing trade line so what do you think is going to happen? Just like a hot air balloon.. I did this for maybe 5 to 6 months putting all I had on these cards until they reached $5000 each. Two of my Orchard bank cards where secured but I didn't add no more then $500 to them and I still have them today. This process enhanced my revolving credit but I also used a credit rebuild program called EUFORA, check it out! it cost me $10 bucks a month but for any good trade line its worth it and it reported as a installment loan, like a mortgage. There are many ways to rebuild, store cards, installment loans and some banks offer secured accounts. I'm in Chicago and we have some furniture stores that will give credit to low credit scores and that can help if you find one. Its about choosing the right one, sticking to it and in no time you're back around the 600 mark or more. With today's loans requirements you can buy a house a year after BK or with a 620 score or even get a credit card.
Good revolving credit is the answer, on time payments is the key but you're the reason why it can only get better! Some may think putting all your money on a secured card in crazy understand this! I am planning and closing on a house by the new year and I choose the new year because I want to save more money and show a stronger length in credit history. You know what's funny also? After the BK thing settled down I disputed some of the creditors on my credit report included in the BK as NOT MINE and they got deleted. Go figure! The rebuilding process takes time and as long as you watch your scores it will motivate you to keep at it. Your car, student loans helps as well make sure you pay on it. When I finished mines my score went up 44 points. I do have a total debt now of $7k(wife's) but that's part of my end of year WIPE OUT! And Jan 4, 2010 700 score and a good realtor all after BK!
Any other questions feel free to reply I didn't want to fill this whole page with steps but tell me some of your options and situations. Like married, live with parents, income, home owner, any credit cards etc. The reason for this is you have to have a plan of attack to get that credit on track. Each pay period has to be planned out. And don't worry about not saving money if you can not, the secured card is FDIC secured and goes into a savings account and you can cancel it at any time. I was planning on using my $5k on both cards for a down payment on my house but I rather get my credit up where my interest is low and no or little down payment.
Until I reach 700,
anemo
You are awesome!!!
Here is a little bit more on my situation. My salary is 65K annually. I live in the DC and do pay rent for my apartment, but luckily I have a boyfriend that pays half of the rent and most of the utilities. That frees me up with quite a bit of extra cash at the end of the month. I get paid monthly. My vehicle is listed on my BK and after reading several hundred blogs on the forum on this site; I will most likely not sign a reaffirmation unless I absolutely need to. If they tell me they are going to repossess my car then I may have to give in, but I am current and have always paid that note on time; so I am thinking they are happy with me paying. If I am not approached about a reaffirmation letter then I will continue to pay for the vehicle, until I can find something better. That will still rid me of the responsibility if I should choose to walk away and find a better deal. Right now I am paying way more than it is worth, but with the economy and my credit being the way it is there is no way I can find anything else. Please advise if this is not a wise decision.
I have a lot of items that are/were placed in collection that are now chargeoffs. Hopefully, those will be reported correctly after my BK is discharged. The BK is showing on my report as filed for Equifax but not on any of the other reports as of yet. (keep in mind it has been about 2 weeks now)
Is it correct to assume that I should wait until after the discharge before applying for and Orchard or New M card? I love the way you have put laid this all out for me. It is essentially, building a savings account and paying bill you were going to pay and creating a valuable reward for yourself.....IMPROVING MY CREDIT!!!!!! Since I have a little time before the discharge is complete, I will save up the money to put on my secured cards. I will also check out the EUFORA program that you mentioned this afternoon. I will keep you posted and will let you know when my 341 hearing is coming up.
I truly appreciate your help and you have/are a tremendous help to me in this process.
It is really nice to to be able to discuss such an embarrassing and difficult to talk about topic.
Yes, I filed Chap 7. Forgot to mention that part
The beauty about this site and others like it, you get the truth and its decent people from all around trying to go in the same direction. We all are leaders and I'm leading you like I've been lead in this matter.
Unless you had to I wouldn't have put the car in BK, you may have been told you have to but having good payment history and no late I would've tired to keep it out(if I didn't own more then its worth). Being that you have on time payments the bank may allow you to keep it without the interest or maybe take a little off. Being that you said you may be upside down on it or its not worth the price you should ask for the interest to be taken off and some form of reduction. If you can make it without the car give it back(put that boyfriend to work) and trust me in a few months you can shop in the luxury isle. Your on time payments will still be on your report and as I said before it should say INCLUDED IN BK and a zero balance but you're will still have GOOD CAR CREDIT. There is a good chance that since the BK is on one of your reports that score may stand. When I had an account and it went from open to included in BK that removed the balance and I received 13 points. I want to say that the worst is over when the the BK goes on it but I can't confirm that as far as the score goes but that is what happen to me.
I kept cards form the BK and they still reported every month like your student loans will. Some lawyers may say to wait and don't apply for anything, the beauty with New M and others like it, they don't run a credit check however Orchard Bank does to determine your card type awarded. The amount of time you're take to save for the card may be good enough as far as waiting so continue to save.
I'm going to jump in and be you!
I would give back all that I can to start over unless they give me $.10 cents on the dollar for the car. Have the student loan report, add the secured credit cards and begin to rebuild. I would also get a credit monitoring service like myfico and watch my reports changes, the good and the bad. Myfico gives you TU & EX I can tell you later how to watch EXP. Don't worry if the credit goes south its part of the process, with great reporting from what ever service you choose new m, OB or any others it will get you back on track. Some say to have three credit cards reporting, I have 6 but agree with having three or four. Work out a plan and stick to it, you make good money so the secured card program will work wonders for you. One mistake I made is when I saw my score go up and up I began to apply for things, DON'T! Set a target score to get and then only buy what you need. I tell you about this because its going to happen when you see that scores go up. Bk has come to be a simply way of starting over and yes its stays on your report for 10 years but you can be buying again in a 6 months to a year!
All my sneaky ways I did to get back on track I will share anytime with you.. Dispute letters, GW letters, being a authorized user etc..
Their is a process to rebuild and time and work will be needed, but worth it! I stayed on this forum day in and day out sometime waking out of my sleep to read on certain things so be ready.
anemo
Thank you! Thank you!!
You are right. My lawyer told me that I did have to include it in the BK, but advised against signing the reaffirmation letter. After reading so many posts, I have decided against signing. The only thing that I will show I owe on will be the student loan ($20K). Since the car will be included in the BK I will not have that debt listed as something I owe anymore however, I will keep paying the bank and using the car until I get financed for something else and return it to the lot once I have taken care of my situation. I will look into Bankruptcy friendly car lenders this weekend.
I think that I may take my chances on opening up a secured card or two before the BK is discharged. I will probably do New M and Eufora and Citi Bank. That will give me 3 cards and help build up some good history while I am waiting for the discharge. I signed up for myfico's services yesterday and received my TRUE scores. My scores are actually EX 502 TU 491. I had subscribed for to all 3 CRAs a month ago, but after reading all of the posts here I cancelled all of the others and switched to Myfico!!! I never knew that there were FAKO scores.
My 341 hearing is on 26 October, is there anything I need to do? I have seen by some others in the forum, that it is a pretty informal meeting.
Hey Beautifull,
I forgot to mention that myfico has discount codes you can seek out by goggling it online, but since you signed up next time.
Going for the cards now wouldn't be a problem, I think Citi uses an underwriter to write their cards and still base it on your credit(check into that) some major banks like Wells etc do. The Eufora card is a small but cheap way of doing a rebuild and if Citi doesn't work out remember New M allows you to have two cards and reports on both. Applied bank and others may work out as well. I've worked with my family members with Bank of America, First Premier (I was an authorized user on BOA but not used any others) BOA has a 99/500 card, meaning if approved you have to put down $100 and they give you a credit line of $500. They do have a secured card as well that can go up to $10K I think.
Meeting,
For your meeting I don't think much will happen unless creditors show up and a disputes breaks out. You do make good money $65k, if I saw that maybe switching you to a chapter 13 may be my dispute and ask to be paid back something. You do have to qualify for both chapter 7 & 13 so by the chapter 7 being in place they may stay clear. The car may be discussed but as I said I wouldn't keep it unless $.10 cents on the dollar where offered, you can maybe check into that thru your lawyer and see if they bite!
A new Car!
You're going to find a lot of BK car lenders after Bk but understand this you may end up right back where you started by being upside down again or having a car note full of HIGH interest. Your TU 491 will not get you a Honda maybe a Dawo and cash down, a lot of cash. Unless you live separate lives form your boyfriend and car pooling is not an option try the $.10 on a dollar thing if not maybe a cash only car, or get someone to buy a car in their name to avoid the BK car lenders and the high, high interest. Well let me say that I wouldn't pay for a car and they get all the credit unless its my spouse, a girlfriend well if I know we are going to be together for sure and can trust them. " If I build them up, they build me up" You can take about $5k with you to the car dealer to maybe help with the loan and avoid being upside down to much. They are going to still look at your scores and you do have good car credit so they may do a advanced scorning with TU to try to boost it up based on that car credit hope to at least get to 550 if they do it that may get you a deal and no down payment. OR you can just bite the bullet and understand you are stating over and except any deal offered!
I don't believe in putting any money down on a car and never have.. I'm going to get me that new 2010 Buick Lacrosse after the house in Jan and I'm not taking a dime. This is what I want you to do. Buy a writing pen a good one and incase it, engrave a score into the glass say like 650. Place it on the fireplace, mirror, desk where ever you can see it daily. I want you to get in your head that when all this is over and you're where you want to be, BREAK THAT MOTHERF!!!!!
YOU ONLY GO SHOPPING WITH A PEN,, SIGN AND DRIVE!! SIGN AND DELIVER IT!!
Your credit will be there after the rebuild!!! There are so many creditors I scouted out that will be great options once your credit is back, like Best Buy! They have a rebuild program at a certain score. You're giving a A or B card I forgot which one but its a major card with a limit of $500 to a $1000
Plan, plan, plan we have work to do..
Anytime,
anemo
Anemo,
I am looking forward to the day when I can be in your shoes!!! It must be a good feeling to walk into a store and get exactly what you want or purchase a home and get what you desire!
It is funny that you mentioned qualification for Chap 7 because of my salary. It was a bit of an issue but it worked out in the end. I have an 11yr old son, so thanks to him I was able to qualify. That made it a two person household and of course my lawyer made sure all of the allowable expenses were matching in order to get the numbers just right. The means test was not so much fun in the beginning and in some cases unfair to those who really need a fresh start.
Really, even if I have the money to pay all of those collections agencies from years ago, would that really have made my credit look any better than if I wouldn't have filed BK? I don't think so.
The CAR
It would be nice if me and my boyfriend could commute, but he works in MD and I work in VA. However, my father would cosign for a vehicle if I need to get another one or I may just get a little something to ride back and forth in until I can get what I really want.
After reading your reply I will lay off of Citi and use the 2 New M cards and the Eufora cards. As soon as my score is something to be desired I will try a store card. I may have to do some searching to see who may be BK friendly... As soon as I get home I am going to write a target score on a little mirror, place it in a mini jailhouse or cage and break it once I hit my score. FREEDOM!!!!
Thanks Anemo,
My Credit Rebuilding Mentor!!!!
I am shopping for my nice Pen TODAY!!!!!!!
Sign and Drive is in my future!!!!!!!