Advice Needed Please Give Me Some Suggestions

[Anonymous]

I have tried asking this in another section of the forums with no replies despite 50 people reading it.  I filed Chapter 13 Bankruptcy in February 2010. All payments made on time and case was completed and discharged in August of this year.  Since I completed my case in August I have gotten one very low installment loan to get out of the payday loan trap I was in. I borrowed money to help my daughter out from a pay day loan (very bad ideal). I followed the rules and did not apply for any new credit the entire 5 years I had a Chapter 13. Payday loan was my only option.

 I applied for a Capital One Quick Silver card and was given unsecured card with $300 limit. I burned them in the Chapter 13 bankruptcy so very surprised and happy they gave me  another chance I am making payments on time and keeping my utilization to 30% or lower. I also bought a new car the first one in over 7 years. I have a reasonable car payment $252 a month.  Will these 3 loans raise my credit score eventually? Approximately how long will it take?  My bankruptcy is due to be deleted from my credit report in February 2017. I would like to buy a house with a mortgage of around $115,000.  I only make about $27,000 a year so I need to keep the amount low. I see many others applying for multiple lines of credit with hugh credit lines.  I have no interest in obtaining multiple credit cards dont really see the point.  The mortgage payment I would end up with is cheaper then what I now pay for rent.  Do I need to be doing anything else to help raise my score?  I did verify all of my credit reports and have disputed all of the errors My credit score is now between 610-640. The credit union where I financed my car said 640 but Credit Karma says 595, 606 and 618.

[jamie123]

How old is your Cap1 card?

[Anonymous]

It is almost 2 months old. They promised a credit line incease after the first 5 payments were made on time. Will the credit line increase boost my score any?

[NRB525]

Congratulations on getting through the BK process.

Is the BK the only negative on your reports? That will drop off in February 2017? If so, then that should be the only real drag on your score.

The Capital One card is a good start. When you say you burned them, part of BK 13 is paying off all the creditors. Was there a charged off portion, or it was all paid eventually?

You might see a score bump from a CLI, although without a clear view to actual FICO scores, the CK scores are useless, FAKO not FICO.

One step to consider is whether you want to apply for a Discover card. They tend to be OK with new files, yours is rebuilding but still quite thin, they have decent rewards, and as an added bonus, they give you your TU FICO score monthly with your CC statement. At the very least, if you apply and are denied, you get the Reasons letter which will have your actual FICO score. You'd get that letter even if you were issued a card because it's likely you won't get their best APR.

[jamie123]

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@Anonymous wrote:

I have tried asking this in another section of the forums with no replies despite 50 people reading it.  I filed Chapter 13 Bankruptcy in February 2010. All payments made on time and case was completed and discharged in August of this year.  Since I completed my case in August I have gotten one very low installment loan to get out of the payday loan trap I was in. I borrowed money to help my daughter out from a pay day loan (very bad ideal). I followed the rules and did not apply for any new credit the entire 5 years I had a Chapter 13. Payday loan was my only option.

 I applied for a Capital One Quick Silver card and was given unsecured card with $300 limit. I burned them in the Chapter 13 bankruptcy so very surprised and happy they gave me  another chance I am making payments on time and keeping my utilization to 30% or lower. I also bought a new car the first one in over 7 years. I have a reasonable car payment $252 a month.  Will these 3 loans raise my credit score eventually? Approximately how long will it take?  My bankruptcy is due to be deleted from my credit report in February 2017. I would like to buy a house with a mortgage of around $115,000.  I only make about $27,000 a year so I need to keep the amount low. I see many others applying for multiple lines of credit with hugh credit lines.  I have no interest in obtaining multiple credit cards dont really see the point.  The mortgage payment I would end up with is cheaper then what I now pay for rent.  Do I need to be doing anything else to help raise my score?  I did verify all of my credit reports and have disputed all of the errors My credit score is now between 610-640. The credit union where I financed my car said 640 but Credit Karma says 595, 606 and 618.

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You need to make a long term plan to boost your credit scores, build good credit history and keep you from getting into trouble again.

These are my suggestions:

1. Start an emergency fund in a savings account. (You need to start saving for a mortgage anyway. You will have at least some closing costs and a minimum downpayment to pay for in a few years.) You don't have to put in much from each paycheck but you need to start doing something even if it is just $10 per week. You eventually want at least 2 to 3 months salary in this account. Don't touch this money unless it is an absolute emergency! Emergencies happen to everyone all the time. You need to have some money to fall back on and keep you out of trouble in the future.

2. Don't charge anything on your credit card unless you already have the money to pay for it. You need to pay your credit card in full every month, no excuses! Try and keep your credit card's reporting balance to less than 10% of its CL each month. This will require you to make at least 2 payments per month.

3. You might not need more than 1 CC but if you want high credit scores and good history you need a minimum of 3 credit cards and 5 credit cards would be better. The credit limits have absolutely no bearing on credit scores as long as you keep utilization under 10%. Once your Cap1 card is 6 months old I would suggest apping for a Walmart card. You get a free monthy FICO 08 TU score after you sign up for electronic payments. Walmart is very generous with CLI. Once your Cap1 card is 1 year old you should app for either another Cap1 card or a Discover IT card. You need to have credit cards that you can keep open for life. They will give you good credit marks every month. Some FICO scoring calculations require you to have a minimum of 3 credit cards and if you don't have 3 credit cards you are leaving points on the table.

4. You need to set up auto payments on all your credit cards for the minimum monthy payment in case you somehow forget to make a payment. In this day and age there is ABSOLUTELY no reason for late payments!

Your credit scores will start climbing month to month as all these good credit marks start to balance out the baddie of your bankruptcy but your scores won't truly be good until the bankruptcy falls off.

Credit Karma is a great place to track what is happening on your reports but their scores are junk. Their scores are FAKO not FICO.

Questions?

[Anonymous]

You will find all kinds of good advice and help related to your situation/questions here http://ficoforums.myfico.com/t5/Bankruptcy/bd-p/bankruptcy

[Anonymous]

Jamie, all very good advice. The bankruptcy is the only negative information on my credit report. Capital One was included in the Chapter 13 list of creditors as were several other cards. The credit card companies only got a small payout on what was owed to them per the Chapter 13 Trustee the rest of the balances were discharged in the bankruptcy. I lost my job unexpectedly 6 years ago thus the reason for the bankrupcy could not find another one that paid the same and could not keep up.

I plan on using my VA eligibility to purchase a home with no down payment. I realize I wil have closing costs and appraisal fees. I applied for a Discover IT card . This was I based on Credit Karma's suggestions and was denied.  I mentioned that I only make about 27,000 a year so not much left to work with after expenses. I do have a 401K I contribute to every month. It's less than $100 a month but at least it's something. Employer matches it up to 3%.  I am trying to raise my grandchildren with only $190 a month for support. This is through the state and is all I will get.  I don't have much left over after paying rent, utilities etc. I suppose I could pay my electric bill, cable and anything that has to be paid monthly by cc and then pay it off . We don't spend much on extra's .I certainly did not plan on having to support more children at my age and am trying to figure out the best solution for them and my future retirement.

Looking ahead to retirement I will have to live on approximately $1,500 month assuming social security is still around by then I'm 52. This accounts for Social Security and my 401K. I'm glad I have a few more years to contribute to it.  I want to purchase a home because my mortgage will be less than what the going rental rate is here.  I know I will have home repair costs so I plan on choosing wisely and hopefully I will get lucky .

[jamie123]

I know money has to be very tight in your household but that makes it even more important to have an emergency fund. If something unexpected were to happen you will be in trouble and that is not a good place to be.

Your first priority should be to seek a better paying job. 52 years old is not that old! It better not be because I'm 55 years old and still think of myself as young!

Really, at least find a job that you could advance yourself in a few years. There are many jobs out there that might start you at $27K per year but after a few years you could be making $50K per year. Look for those types of jobs. This would really help your situation.