What can I expect for my FICO score in the future?

[sweetpea3829]

I'm wondering if anybody might have any idea...lol.

We had a bankruptcy discharged in April of 2007.  Prior, our scores were right around 800.  The bankruptcy is a long story...

Right now, we have a FICO score of 660+ (according to a lender). 

Our file looks like this:

Truck loan paid off in 2009.  Never late

Auto loan paid off in 2009.  Never late (shows as discharged in the bankruptcy, but we'd never been late)

Auto loan opened in March of 2010, we owe $6500.  Never late.

Student loan, approx $5,500.  Never late.

WAMU credit card, converted to Chase, opened in 2008 and closed in 2010 by consumer.  (Gotta LOVE Chase's 23% interest rate for no other reason other than "to maintain profitability on your account"...I'll never do business with them again).

Teamster Federal Credit Union credit card opened in 2010.  Credit limit of 3k, balance around 1k.  Never late and highest balance was 1700

There are some older files, but all are closed.  With the exception of one mortgage and two credit cards from the debaucle in 2006/2007, we'd never been late on anything.  I expect that those older files are going to be falling off our report in the next year or two.

There were some hard inquiries this past summer when we were trying to obtain a mortgage modification for the mortgage loan that was IIB. 

And there will be a hard inquiry from this past week...we're trying to obtain approval for a home loan.

Any thoughts?  Suggestions for improvement?  We have four trade lines, a variety of different types of credit, etc.  I keep the balance within 30% of available credit on the credit card (usually). 

If everything stays the same, what do you think our scores will do when the bankruptcy falls off?  And who determines if the bankruptcy falls off in 7 years or 10?

If we do get approved for the mortgage loan (and our never late), will that have any bearing on our scores?

Thanks for any info!

[llecs]

There's no way to predict a score, especially with multiple variables. I can probably say with some certainty that your number one score drain is the BK. Though, I bet you can hit into the 700s with it reporting, with time. You may want to pull your two FICO reports. On pages 2 & 3 of those reports, you'll find a list of what hurts the score the most, and if showing, what helps the most. That should be a guide for improving your score.

Since you only have one CC that helps your mix of credit since it is the only one open, you'll likely benefit score-wise by adding another. For max results, get your CC to report a balance of under 9% of the CL. Thirty percent is too high. If in the middle of a mortgage, then don't get the second CC. Wait.

Per CRTP of the BK, the FCRA says 10 years, but I think Chp. 7 BKs are 10 years, but Chp. 13 is 7 yrs.

Some have reported a slight bump in score when adding their first mortgage. If the one you did a modification with over the summer reporting? Are you paying on it now? If so, how would that play into your budget?

[sweetpea3829]

The modification was actually denied on the basis that we'd never been in default and therefore were not at risk of default.  How that logic applies is beyond me...but that's what the paper says.  The other reason was that we have too much in liquid assets...our accounts valued about 6k at the time.  The kicker though is that 2k of that was a mortgage payment that had yet to be deducted and another 1500 of that is tenant security deposits.  Another 1k of that is our 5 year old daughter's money (counts though because it's not solely in her name). 

That was August...and when we got the denial...we decided to stop paying.  As the loan has been discharged, they have no legal liability and it reports no different than when we pay on time.  We figure they will foreclose...which we are fine with.  We do NOT know if the foreclosure will actually show up on our credit report though.  I don't *think* so, as the loan was discharged, but can't be sure. 

We hope that the mortgage company will actually modify the loan.  It would certainly be in their best interest to do so.  The property is only worth 150k, and probably going to drop further in value as the pit across the street is up for short sale with an asking price of 160k (they'll never get it, and I know for sure the owners will let it foreclose otherwise...they just bought a sweet single family on the other side of town and have no reason to hang on to the multifamily across the street, especially with it being underwater like it is).  Anyways, ours is currently worth 150k and we owe over 260k.  We'll be happy to keep paying on it if they modify.  But otherwise...it's a terrible investment and slay me for being a deadbeat, but who in their right mind would continue to pay on something that will NEVER be worth what we will ultimately pay for it, interest included?  Especially if you don't actually have to, legally. 

So you think I should bring the CC balance down?  Done.  We'll hold off on the second CC until after we find out if we can qualify for a USDA loan on an exception basis (the exception being that our shelter costs are very high and a USDA loan will significantly drop those expenses, making it easier for us to repay our debt obligations). 

[llecs]

You may want to post in Mortgage Loans board for answers on the mortgage and BK. How it reports is important too. I don't know enough about lending standards and mortgages included in BK. However, a loan mod would likely be an issue. Some lenders may mark you late under a modification even if you pay on time. The reasoning is that you are paying less than the contract amount. Lates under a loan mod, or even a loan mod itself, could knock you out of contention for a new loan. Any lates reporting on the mortgage would be an issue too. Again, I'm not an expert on this.

[sweetpea3829]

With our particular loan, because it was discharged, it only ever shows up as IIB (included in bankruptcy).  Pay on time, don't pay at all, loan mods, etc will not affect the reporting of the loan.  I'm not sure if a foreclosure on an IIB mortgage will show up...I don't think so though.