topic Re: Chapter 13 Effect On FICO Over Time in Bankruptcy

Chapter 13 Effect On FICO Over Time

Horrace36 — Mon, 21 Oct 2013 17:10:27 GMT

I noticed that the FICO simulator question about bankruptcy gives as a last choice "more than 4 years ago". Does this mean that there is no positive effect on FICO score between years 4 and 7 after the filing of a chapter 13?

Re: Chapter 13 Effect On FICO Over Time

Horrace36 — Wed, 08 Jan 2014 00:23:45 GMT

This is copied from the Central Ohio Credit Union Website - Hope you find it useful

Understanding & Improving Your Credit Score

Components of a Credit Score

35% = based on payment history (i.e. on-time pays or delinquencies and more weight is put on current pay history)
30% = capacity
15% = length of credit
10% = accumulation of debt in the last 12 - 18 months (# of inquiries & opening dates)
10% = credit mix (installment raises scores, revolving lowers score and the number of finance companies lower the score as well)

Approximate Credit Weight Each Year

40% = current to 12 months
30% = 13 - 24 months
20% = 25 - 36 months
10% = 37+ months

What actions hurt a score?

Missing payments (regardless of the dollar amount, it will take 24 months to restore credit with one late payment)
Credit cards at capacity (i.e. maxing out credit cards)
Closing credit cards out (this lowers available capacity)
Shopping for credit excessively (auto & mortgage shopping do not have a negative effect)
Opening up numerous trades in a short period of time
Having more revolving loans in relation to installment loans
Borrowing from finance companies

What will improve a score?

Paying down on credit cards
Not closing credit cards
Continue to make payments on time (older late payments will become less significant over time)
Slow down on opening new accounts
Acquire a solid credit history with years of experience
Moving revolving debt to installment debt

What doesn't affect the score?

Debt ratio
Income
Length of residence
Length of employment

Scoring "Cheat Sheet"

Almost impossible to score 700+ points with any current delinquency
Almost impossible to score 700+ points without good capacity
Will always score 700+ with good capacity and no public records, current or past delinquencies
Will always score 500 point range or lower with no capacity and current delinquencies
Will score 600 range if doing well with how you pay and okay in capacity
Will score 600 range if doing well with capacity and okay in how you pay

Impact of Bankruptcy

730 Score (at time of Bankruptcy) = Loss of 200 points = 530

560 Score (at time of Bankruptcy) = Loss of 30 points = 530

Re: Chapter 13 Effect On FICO Over Time

juggalo9er — Wed, 08 Jan 2014 02:49:07 GMT

@Horrace36 wrote:
This is copied from the Central Ohio Credit Union Website - Hope you find it useful

Understanding & Improving Your Credit Score

Components of a Credit Score
35% = based on payment history (i.e. on-time pays or delinquencies and more weight is put on current pay history)
30% = capacity
15% = length of credit
10% = accumulation of debt in the last 12 - 18 months (# of inquiries & opening dates)
10% = credit mix (installment raises scores, revolving lowers score and the number of finance companies lower the score as well)
Approximate Credit Weight Each Year
40% = current to 12 months
30% = 13 - 24 months
20% = 25 - 36 months
10% = 37+ months
What actions hurt a score?
Missing payments (regardless of the dollar amount, it will take 24 months to restore credit with one late payment)
Credit cards at capacity (i.e. maxing out credit cards)
Closing credit cards out (this lowers available capacity)
Shopping for credit excessively (auto & mortgage shopping do not have a negative effect)
Opening up numerous trades in a short period of time
Having more revolving loans in relation to installment loans
Borrowing from finance companies
What will improve a score?
Paying down on credit cards
Not closing credit cards
Continue to make payments on time (older late payments will become less significant over time)
Slow down on opening new accounts
Acquire a solid credit history with years of experience
Moving revolving debt to installment debt
What doesn't affect the score?
Debt ratio
Income
Length of residence
Length of employment
Scoring "Cheat Sheet"
Almost impossible to score 700+ points with any current delinquency
Almost impossible to score 700+ points without good capacity
Will always score 700+ with good capacity and no public records, current or past delinquencies
Will always score 500 point range or lower with no capacity and current delinquencies
Will score 600 range if doing well with how you pay and okay in capacity
Will score 600 range if doing well with capacity and okay in how you pay
Impact of Bankruptcy
730 Score (at time of Bankruptcy) = Loss of 200 points = 530
560 Score (at time of Bankruptcy) = Loss of 30 points = 530

have to argue with the impact of score. before i filed i was around 530, the bk increased the score because i essentially had no debt