Valued Contributor
Posts: 1,063
Registered: ‎05-26-2010
Re: Considering BK? FICO told me if you file BK paying your bills on time won't help you

You haven't told us enough to give advice on how to raise your scores, or what your reason for raising it is.  (For example my goal was a 640 mid-score to be able to buy a house with FHA two years after discharge).


Each IIB account is a derogatory, and seems to be considered a "failure to pay".  You can't get around that, it's true and will stay on your report 7 to 7.5 years.  As time passes the impact will be reduced, I haven't hit the two year mark so can't say whether there's a "bump" at two years.  But I raised my score significantly since my discharge.


Remember your mix and age of credit are big factors.  From what I've seen (my experience and postings read here and elsewhere), you need "at least two" major credit cards (I sought three), and a revolving loan.  A mortgage helps but unless you had a house and either reaffirmed or are doing a stay-and-pay, and the lender is reporting, you won't have that.


For your credit cards, two of the three should report a zero balance, and the third should report "less than 10%" (some say "9% or less).


To get credit cards you may need to secure them with savings deposits initially.  Credit Unions are a good avenue, I did a "double play" by depositing $1,000 with the CU to secure an installment loan, took the $1,000 loan proceeds and deposited into savings for a secured VISA card.


You probably won't get anywhere arguing with FICO, they will succeed in saying they aren't a CRA and just provde a scoring service based on CRA data.  Focus on the accuracy of your reports, good habits, and modest use of reestablished credit, based on secured cards / loans if necessary to get started.

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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