Post Ch 7 BK Account Status and Scoring

[Anonymous]

Hi all,

I had a few questions regarding scoring after bk discharge. I had a couple of accounts that even though included in BK, original creditors left them in "Charge Off" status and were actively reporting 3 months after discharge. After many disputes with the CRA, the last 3 accounts were changed to "Included in BK". Months reviewed still shows, even though CRA has deleted the 81 month payment history. The status of these credit card accounts has been changed and the dispute should show completed any day. Once the dispute is completed, will my score increase with the charge off status being changed?is it true that if an item is in dispute, it's not figured into current score? I have scorewatch and have had for about 4 months. My wife and i filed jointly and believe it or not she is at a 629 fico only 3 months after discharge. I'm at a 550. We have 2 unsecured cards, 1 of which we got 2 months before the discharge even took. Having these 2 cards seems to have helped our scores greatly, or so I thought? I read open positive credit card accounts don't really count or make an impact on your score until the 6 month mark, is this true??

Thanks All....

[Jazzzy]

Hello, and welcome to the forums.

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@Anonymous wrote:

Hi all,

I had a few questions regarding scoring after bk discharge. I had a couple of accounts that even though included in BK, original creditors left them in "Charge Off" status and were actively reporting 3 months after discharge. After many disputes with the CRA, the last 3 accounts were changed to "Included in BK". Months reviewed still shows, even though CRA has deleted the 81 month payment history. The status of these credit card accounts has been changed and the dispute should show completed any day. Once the dispute is completed, will my score increase with the charge off status being changed? If these accounts were shown as charge-offs and now they will show included in bankruptcy, I would think that could give you a score boost. So much of whether or not you get a boost depends upon how many negatives remain on your reports. Sometimes there is not much of an effect if there are negatives remaining.

is it true that if an item is in dispute, it's not figured into current score? I don't think we have a definitive answer to that. And also, there are 3 different reporting agencies. They may all handle this differently.

I have scorewatch and have had for about 4 months. My wife and i filed jointly and believe it or not she is at a 629 fico only 3 months after discharge. Were these accounts showing as charge-offs on her reports as well...or were they reporting correctly for her?

I'm at a 550. We have 2 unsecured cards, 1 of which we got 2 months before the discharge even took. Having these 2 cards seems to have helped our scores greatly, or so I thought? I read open positive credit card accounts don't really count or make an impact on your score until the 6 month mark, is this true?? These accounts likely helped you when you got them. They are young accounts, so they are hurting your average age of accounts (AAoA), but you need to start building positive credit history. FICO wants to see you handle revolving credit responsibly, so it helped you when you got them....now FICO will watch how you use them. If they are small credit line cards, be very careful how much use you let report. To maximize your scores, you not only have to manage the debt you have, you have to manage how it reports. Going online and paying these cards off before they report to the CRAs will help your scores.

Thanks All....

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Do some reading here in the forums...especially the Rebuilding Your Credit forum...and you will learn a lot to help you in your rebuilding process. My advice would be to not go hog wild and get any credit cards you can just because you qualify. I know, it's a good feeling to finally qualify for something after bankruptcy...but be patient and build strategically. Wait and apply for the cards you truly would like to have...not just the ones you know you can get. Getting a stable of low credit line cards now will accomplish nothing but lowering your AAoA.

[Anonymous]

Hi Lynette, Thanks for responding..

There is nothing left negative on my credit report. Now, after Charge Off's being changed, 100% of all accounts show a $0 balance and included in BK. I have some student loans that show pays as agreed that go back to 2004, they remained through the BK. The only other accounts are the 2 unsecured cards we received. My wife had a sustantially different credit history. We do not share any credit accounts. Most of the items on BK were from my past. I also have an auto loan that I co-signed for my ex wife. She has been paying on time on that loan for 3 years and is nearing paying it off. It shows pays as agreed on me still. As far as the credit cards, limits, balances and payments. We have PIF 2 out of 4 moths and 2 times minimum payment the other 2 months. On the open dispute and scoring issue, my score dropped about 10 points when I opened the dispute nothing else changed that month. I'm not sure how many points I might get back for getting rid of 3 charge off statuses and having no more negatives other than BK?? I'm waiting for the dispute to officially complete now, and crossing my fingers I will see the score increase when this happens.

[Anonymous]

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@Anonymous wrote:

I read open positive credit card accounts don't really count or make an impact on your score until the 6 month mark, is this true??

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I think you're referring to those with no credit history.  You need six months of activity before a credit report will be generated.

Once you show up on the CRA's radar, new accounts report on your CR's and have an impact on your score immediately.

You are right to note that having an open CC will help you rebuild and has a positive effect on your FICO scores.  Figure out your current AAofA.  And then figure out what it would be if you open any new account (cc or installment or anything).  That will help you decide if you should open any additional account (it's very likely you will benefit from waiting a year before apping for anything additional). 

It's also good to note that IIB is considered a negative account.  So, even though the accounts were updated from the incorrect charge off status, their IIB status is still considered a negative.  (They're in the same category as 90+ days late or worse).

As Lynette noted,  Do some reading here in the forums...especially the Rebuilding Your Credit forum - there's a ton of good info there.  And there's a lot of folks who are rebuilding after BK very successfully. 

Congrats on your good work rebuilding and cleaning up your credit report!

[wednesdayaddamsd]

Can I ask what your scores were before you filed? Just curious, I am in the process of filing right now, and my scores are awful! )

[Anonymous]

Sure,

Both my wife and I's scores were in the upper 300's to lower 400's before BK. Surprisingly the CRA's starting updating the accounts to bankruptcy status about 45-60 days after filing. We had a pre-approved unsecured card offer at 60 days after filing. I was really surprised. Less than 60 days after filing our scores were in the low to mid 500's. Suddenly qualified for a new Bank of America Account, had a credit card. It was a good feeling. Were at 2 months after discharge now with the one credit card under our belt at 4 months and my wife is a 629 and I'm about a 582 today. Not bad at all given the situation. We just got our second unsercured card offer this week. I can't speak for everyone, but it was the best decision we ever made and it feels really good after 4 years living with a 400 credit score. Good Luck...

Ken

[wednesdayaddamsd]

I filed on 6-9 and so far, have only had one account (of many) IIB on my credit report, however, that one account gave me 33 points in one day on Equifax, and 22 points on TransUnion. I have to say that my score increased a few points right after filing, it was only about 7 points, but I don't know why that happened.

I am anxiously awaiting the next accounts that start to report as IIB, so I can see more of a score increase. I am praying I see similar increases with each subsequent account that gets IIB, but I am doubtful that each account is obviously going to add 33 points.

My 341 meeting is scheduled for 8-5, has anyone else had a 341 scheduled almost 2 months after filing? Are the BK courts swamped or something?

[Anonymous]

I filled on 5-1-10 and had my hearing on 9-12-10.  On 7/13/10 my credit scores where TU=502; EQ=520; and EXP 510.  As of 10/13/10 they are TU=580; EQ=582 and EXP is 587.   I still have 8 accounts showing that have not updated to IIB and showing with a balance so I am hoping once those update my score will go up a little more.  I have to say that after 3 1/2 years of "thinking" about bankruptcy and trying to handle almost 95k in debt on my own after a divorce to where I am now, I really  wish I wouldn't have thought about it for so long and just done it and put it behind me earlier then what I did.  Now for the had part... moving forward and not screwing up this time..