Valued Contributor
chasmith
Posts: 1,062
Registered: ‎05-26-2010
Re: Planning For Recovery

Adding my thought to those of shold44...

 

Right now be sure you have current hard copies of your three credit reports.  Your lawyer probably pulled them, but it;s critical to have the real reports from the free annual credit reports site (the real one).  The reason is that as you clean up after discharge you may need to prove things.  For example I discharged a GECRB account, they tried to change others they had previously closed to IIB.  Because I could prove they were closed prior to filing I was able to get them changed back to closed, zero balance, with no negatives.  You also need accurate DOFD information.

 

Other than that there's not much you should do before discharge.

 

If you discharged CapOne you may not be able to get even a secured card from them.  That was my experience, what was frustrating was that that they approved me then denied me after receiving my deposit.  (HSBC did the same thing).  There are other options.

 

You mentioned you opened an account with USAA.  Are you a "full" (insurance qualified member) or a banking customer?  I see back and forth about whether their secured cards are available to less than "full" members.  They offer a secured, true Amex card, as well as a secured Mastercard.  The downside is their secured cards don't "graduate".

 

If you were eligible for USAA full membership, are you eligible for Navy Federal Credit Union (NFCU) membership?  The rules are a bit different between the two but worth looking into.  I would open checking and savings accounts at NFCU now with direct deposit.  Then wait until discharge, apply for credit from NFCU, and if denied then do a secured "double play" by taking a secured installment loan, then using the proceeds to secure a secured VISA.  I've heard of many people getting unsecured credit right after discharge from NFCU, I didn't even ask, I went with secured products right after discharge.  My secured card graduated after a year with an increase in limit.  16 months after discharge I refinanced a car loan at 5.99%.

 

If you aren't able to join NFCU look into other CU options in your area.  You may qualify for one through you employer.  Many CUs will work with you after discharge.  Other than USAA I won't deal with a bank again if I can help it, CUs are much better IMHO.

 

To maximize your score you need "two or three" national credit cards, and installment loan, and eventually a mortgage if you choose to buy a home.  (Paradox of credit scoring as one mortgage broker put it - "the best way to raise your score is to get a mortgage").  Store cards aren't as good.  Definitely keep total utilization below 30% on revolving debt (below 10% is better).  If you get a secured card each from USAA and NFCU along with a secured installment loan that's your best shot.

 

The car is a risk.  I had to deal with a lease vehicle return, luckily I was able to finance a certified used car with Ford Motor Credit at 11% 9 mos after discharge (many years of positive experience with FMC, no discharge with them), refied seven months after with NFCU.  I just traded that car in and got a new Ford on 66 mos zero percent through FMC.  I would NOT deal with the bankruptcy programs sending you mailers. 

 

 

 

 

BK7 Filed 8/11/2009 Discharged 11/23/2009. Purchased new home 4/11/2012
Starting Score:11/16/2009 EQ 566 11/16/2009 TU 538
Interim Score: 12/27/2012 EQ 683 09/17/2012 EX (lender) 670 1/01/2013 TU 701
Current Score: 11/06/2013 EQ 708 11/06/2013 EX 702 11/16/2013 702 11/06/2013 TU 729
Goal Score: EQ 740 EX 740 TU 740
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