topic Re: Advice Needed. Post BK in Rebuilding Your Credit

Advice Needed. Post BK

Dhani76 — Sun, 12 Sep 2021 19:13:22 GMT

Ch 7 discharged 7/21. Burned AMEX for only $500 & Cap1 for $700. Still have banking & car loan with them. All in good standing. CreditOne offered me $300 CL now at $450. Loft & Ulta through SCT similar CLs. Current CU 8%. Current scores TU 648 EXP 621 EQ 644. Not going after any HPs. Just SCT & checking on pre-qualify sites. I see some on here post BK with way higher CLs & even refinancing their car loans. Am I doing something wrong?

Re: Advice Needed. Post BK

FLLGuy — Sun, 12 Sep 2021 20:43:38 GMT

@Dhani76 wrote:
Ch 7 discharged 7/21. Burned AMEX for only $500 & Cap1 for $700. Still have banking & car loan with them. All in good standing. CreditOne offered me $300 CL now at $450. Loft & Ulta through SCT similar CLs. Current CU 8%. Current scores TU 648 EXP 621 EQ 644. Not going after any HPs. Just SCT & checking on pre-qualify sites. I see some on here post BK with way higher CLs & even refinancing their car loans. Am I doing something wrong?

Hello - Welcome and Congrats on your discharge. Time for a refresh and new beginings.

I wouldn't say you're doing something wrong but rather an opportunity and recommend looking from a different perspective. Many of us once discharged are eager to rebuild (nothing wrong with that) BUT the narrative throughout the community you'll notice a fine balance between beign tactical and strategic. I do agree with you do SP where possible to gauge where you stand and if you decide on HP make sure it counts - however, don't expect high limits considering the circumstances - focus is to grow and establish credibility.

Highly notable recommendations are the following to optimize scoring:

Obtain 3 revolving credit cards (primarily Visa,MC, or Discover) advice is to completely avoid store credit cards if possible.
- Options are limited who will provide recent dischargee with unsecured credit - so consider secured options that will graduate and grow like "discover, nfcu, FNBO, TD Bank". Don't get discouraged we all have to restart somewhere.
- Use your cards PIF before statement cuts
- Allow one card to report small balance to CRAs less thatn 8.9% (rotate the cards - following AZEO) all zero except one
- Even though you burned CAP1 like many of us have - they are very forgiving and will welcome you back. Remember, CAP1 has a large footprint opening the doors back into credit. HIGHLY recommend you check out their prequalify site.
- Discover is also a great option make sure you do their prequalify site
- Also, you may get an offer from OLLO rewards card they are decent and don't have the predatory fees like Credit One. If OLLO comes your way take it.
- Becareful not fall victim to CreditKarma's "outstanding approvals" as they are paid advertisers. Always go directly to the main credit provider and do SP where all possible.
- As previously stated minimize your store credit cards - keep focused on mid to long term strategy (aging and growing your credit).
1 installment loan
- (self starter loan, student loan, mortgage,auto)
- there are plenty of postings here on SSL - self starter loans.

some reading for your knowledge maybe dated but overall principle remains the same - https://ficoforums.myfico.com/t5/Bankruptcy/HOW-TO-From-BK7-discharge-to-700-in-24-months-or-less/m-p/1384075

Re: Advice Needed. Post BK

Dhani76 — Mon, 13 Sep 2021 04:42:11 GMT

That is an AMAZING response. I will take this to heart. THANK YOU 🙏

Experian app has been telling me I am "pre-approved" for the Ollo card. Was hesitant to take the bait as per your Credit Karma advice. I pulled the trigger. Approved for $2K!!!! ❤️

Re: Advice Needed. Post BK

FLLGuy — Tue, 14 Sep 2021 00:23:32 GMT

@Dhani76 wrote:
That is an AMAZING response. I will take this to heart. THANK YOU 🙏
Experian app has been telling me I am "pre-approved" for the Ollo card. Was hesitant to take the bait as per your Credit Karma advice. I pulled the trigger. Approved for $2K!!!! ❤️

That's great news and congrats on the new $2K! I also have OLLO with a smaller limit than yours, i like they don't have predatory fees and payments post much quicker than CreditOne. It's a decent card and it will grow with you - many on here report getting regular auto increases every 6mos. Keep the formula in mind to help optimize your scores (3x bank CC revolvers + 1x Installment loan w/all ZEROs & only ONE card reporting less than 8%).

A few things to keep in mind as you continue your rebuild:

Also, every week keep checking CAP1 and Discover pre-approval page they are safe SPs. If CAP1 prompts you with options to choose don't app for the QuickSilver One w/AF. You'd rather get their Platinum card which doesn't have perks but that's OK your focus is mid to long term growth. Depending on your credit file (YMMV) CAP1 may give you between $300 - $3,000 on the Plat card straight outta BK Discharge. BTW - this card with responsible use in 6mos can be upgraded to the QuickSilver Rewards cards w/perks (to be clear not the QS1 w/annual fee) with nice CLIs with due time. CAP1 likes to see you run heavy use through their card and PIF. If you play your cards right you may even get pre-approved for their SAVOR or SAVOR ONE cards with potentially a higher limit all depends on how you treat them. Just remember CAP1 comes with 3x HPs - which is fine don't let that roadblock your moves as long as you strategize your game plan. Think marathon and not race.

Also, Discover may also come around and preapprove you - highly recommend you take this card. They are known for healthy CLIs. If you go through their pre-approval page and they present you with "Congrats You're Pre-Approved" take a good look at the APR %. If you see a range, for example (11.99% - 25.99%) then don't app. However, if you see a fixed and NO range (11.99% or 20.99%) then you are good to app they're pretty solid.

Congrats once more and keep us posted on your progress and journey - don't forget to follow the road to 700 in 24months post BK7.

Re: Advice Needed. Post BK

FLLGuy — Tue, 14 Sep 2021 00:56:02 GMT

@Dhani76 wrote:
Ch 7 discharged 7/21. Burned AMEX for only $500 & Cap1 for $700. Still have banking & car loan with them. All in good standing. CreditOne offered me $300 CL now at $450. Loft & Ulta through SCT similar CLs. Current CU 8%. Current scores TU 648 EXP 621 EQ 644. Not going after any HPs. Just SCT & checking on pre-qualify sites. I see some on here post BK with way higher CLs & even refinancing their car loans. Am I doing something wrong?

btw - i noticed you burned AMEX for $500. You may want to consider paying this off considering it's such a small amount as you may be blacklisted from their internal system. Not sure if you plan in the future to pursue Amex again but even if you're discharged through BK 7 they may still have you flagged internally. Just so you know AMEX is known to let people back 5yrs + 1mos from filing date (not discharge). However, if you burned them then it's almost a life sentence of credit prison. However, that being said - most on here whom have paid AMEX back are once more welcomed into their arms. Just my $.02.

Re: Advice Needed. Post BK

Dhani76 — Tue, 14 Sep 2021 03:33:37 GMT

Taking all this as Gospel & thanks, again!

Re: Advice Needed. Post BK

FLLGuy — Fri, 17 Sep 2021 12:55:43 GMT

@Dhani76 wrote:
That is an AMAZING response. I will take this to heart. THANK YOU 🙏
Experian app has been telling me I am "pre-approved" for the Ollo card. Was hesitant to take the bait as per your Credit Karma advice. I pulled the trigger. Approved for $2K!!!! ❤️

Speaking of OLLO - I've had them now nearly two years started with $500 then 6mos later upto $600, which sat there until this morning. This morning they bumped me up to $2100. I'll take it - i guess some of your winning spirit rubbed off a bit on me.

Re: Advice Needed. Post BK

SoonerSoldier33 — Fri, 17 Sep 2021 14:25:02 GMT

Speaking of OLLO - I've had them now nearly two years started with $500 then 6mos later upto $600, which sat there until this morning. This morning they bumped me up to $2100. I'll take it - i guess some of your winning spirit rubbed off a bit on me.

I keep sporadically getting a pre-approved offer for the Ollo Optimum Mastercard (2.5% cash back and no AF) through the Experian app. One day it'll be there, and the next it's gone. I can't figure out if they keep changing their mind about me, or if since their cards are invitation only, they hit their quota for a specific time and pull the offers. I'm gardening in preparation for an auto loan in about a month, so I don't want to apply for anything new just yet, but it sure is tempting every time it pops up. I have DIscover it for 5% rotating categories, Cap One Savor One for 3% dining and streaming, and Cap One Wal-Mart for 5% online, 2% in store, and 2% gas, but I'd really love to have that Ollo for 2.5% uncategorized and to fill out my revolvers before I dive back into the garden. I really hope I'll have a pre-approval offer right before my car loan, so I can grab it, and only have the difference of 1 hard inquiry reporting going into my auto financing. FIngers crossed!

Re: Advice Needed. Post BK

FLLGuy — Fri, 17 Sep 2021 19:24:00 GMT

@SoonerSoldier33 wrote:
I keep sporadically getting a pre-approved offer for the Ollo Optimum Mastercard (2.5% cash back and no AF) through the Experian app. One day it'll be there, and the next it's gone. I can't figure out if they keep changing their mind about me, or if since their cards are invitation only, they hit their quota for a specific time and pull the offers. I'm gardening in preparation for an auto loan in about a month, so I don't want to apply for anything new just yet, but it sure is tempting every time it pops up. I have DIscover it for 5% rotating categories, Cap One Savor One for 3% dining and streaming, and Cap One Wal-Mart for 5% online, 2% in store, and 2% gas, but I'd really love to have that Ollo for 2.5% uncategorized and to fill out my revolvers before I dive back into the garden. I really hope I'll have a pre-approval offer right before my car loan, so I can grab it, and only have the difference of 1 hard inquiry reporting going into my auto financing. FIngers crossed!

Congrats and I like your approach preparing to strike for a new auto loan i'd say it's methodical and the correct way of doing things. Experian is funny like that both my wife and I experience the same with some other card offers "here today, gone tomorrow". Recently 6wks after my discharge I now see "pre-approvals" for Cap1 (savor1,venture1,QS) and Discover with a fixed apr 20.99% for (cash back,gas/rest,miles) - im itching to strike as my credit profile is on the rise but chicken-out at the end to keep my inq's to minimum. I'd like to buy a new house by Jan/Fe 2022.

Re: Advice Needed. Post BK

southernblueeyes — Fri, 24 Sep 2021 01:13:09 GMT

If you get an offer for Ollo I would take it. They approved me for $1500 8 months post bk7 discharge. Six months later cli to $1800. Three months later another CLI to $2700.

Capital One is very forgiving. I burned them $29,000. Took 18 months after discharge but pre-approved for four cards. Didn't apply because I'm in the garden til March which is two years after discharge.

Just hang in there. One step at a time.

Re: Advice Needed. Post BK

SoonerSoldier33 — Fri, 24 Sep 2021 11:47:16 GMT

Congrats and I like your approach preparing to strike for a new auto loan i'd say it's methodical and the correct way of doing things. Experian is funny like that both my wife and I experience the same with some other card offers "here today, gone tomorrow". Recently 6wks after my discharge I now see "pre-approvals" for Cap1 (savor1,venture1,QS) and Discover with a fixed apr 20.99% for (cash back,gas/rest,miles) - im itching to strike as my credit profile is on the rise but chicken-out at the end to keep my inq's to minimum. I'd like to buy a new house by Jan/Fe 2022.

Thanks! You're doing the right thing as well in prep for your mortgage. Just FYI...it's not necessarily the hard inquiries you'd need to be concerned with in prep for a mortgage. It's any new actual accounts reported. The mortgage scores are very, very sensitive to new accounts. Best advice...no new accounts in the 12 months prior to applying for a mortgage. If you're looking to apply for a mortgage in 3-4 months...hold off on any new credit products until after.

Re: Advice Needed. Post BK

HowDoesThisAllWork — Sat, 25 Sep 2021 01:06:53 GMT

@FLLGuy

Dude, you are pretty smart! LOL! But where was the sense of humor? Ha! Ha!

Agree with what you said. So, as I see so many others doing (which is why I did **NOT** do it, directly), I would gladly add a "+1".

It can be totally frustrating with the really small starting credit limits ($300 - $700).

It can also be a *HUGE* ego hit to "have to settle" for a secured credit card. Honest comment here: suck it up, buttercup!

I first opened a SkyOne secured credit card. Great card. But.....it *never* graduates and it has a $35 annual fee. Would consider Capital One, Discover, NFCU (if you can get it), and a few others. But those two - if available - seem to be the "go-to" answer. I will add a "+1" to that (hell yeah!).

I would also suggest staying away - if possible - from the "less than optimal" credit cards. Talking Credit One, Surge, TOTAL, Premier One, et al. I speak from experience. I had a Credit One. I had a TOTAL Visa. I had a Surge MasterCard. I still get several "pre-approved" offers in the mail from "less than optimal" credit card companies.

So, why do I suggest staying away - if possible? Because of their terms and conditions. For full disclosure, I loved the Credit One card. I did not like the terms, though. I had a really good relationship with Credit One (lots of people say that they try to confuse people by looking VERY MUCH like Capital One....I do not disagree with that! ). I closed that Credit One account after having a very long conversation with Level 3 of the Customer Service. I was at a point in the "rebuild/build" that the terms were of little interest. But, for the 11 months that I had the Credit One card I used it a lot (and made a lot of payments....LOL).

I would also suggest to people that they avoid (not telling anyone what to do....but speaking from personal experience here) the Credit Karma, Credit Seasame, Wallet Hub, Nerd Wallet web sites. Again, for full disclosure, I have an account with all of those. They all are very good at leading the uninitiated. I will put things that way. :-)

And excellent point on the "credit mix" part. Lots of people overlook that. Now, it is worth, what?, 10% of your FICO Score but the Auto Scores are very happy when one has both revolvers and installment loans in the mix! I just opened up an SSL (Savings Secured Loan) with NFCU. Great product - for those of us who are able to get into NFCU.

I would add one thing to your post (one can dismiss all of the above.....as it is just my experience): consider joining a Credit Union.

My experience with NFCU - to date - has been amazing. And that is not to say that my experience with my other "financial institutions" has been problematic. Not at all. NFCU has just been a little "extra" (Ha! Ha! Look at the old man using 'cool terms'). And in the most positive of ways. NFCU may not be available to all. And if "you" are not eligible, then I would suggest that "you" find another Credit Union. And get involved. I am putting a lot of eggs in the MFCU Basket (but not all of them....that would be just plain stupid! - generally speaking).

Re: Advice Needed. Post BK

Horseshoez — Sat, 25 Sep 2021 01:30:55 GMT

@HowDoesThisAllWork wrote:

It can also be a *HUGE* ego hit to "have to settle" for a secured credit card. Honest comment here: suck it up, buttercup!

I think there are two very different ways of looking at secured credit cards; the first is "settling" for a low limit card, say $500, the second is stratigically opting for a high limit secured card with a credit limit of say, $5,000. The difference is the first may eventually graduate and see a slow growth of the credit limit, however, virtually all of the high limit secured cards I've researched have a good track record of graduating relatively quickly, and keeping their high limit at the same time. This was definitely my experience with my TDCash card, it started as a $5,000 limit secured card, and then graduated to unsecured after 6-months with the same credit limit and an upgrade to a Signature Visa.

Providers of higher limit (i.e. $2,500 and higher) secured cards include, but are not limited to, the following (some of which are geofenced):

Navy Federal
Discover
FNBO
TDBank
Fifth Third Bank
CITI
Bank of America

Re: Advice Needed. Post BK

HowDoesThisAllWork — Sat, 25 Sep 2021 08:39:12 GMT

@Horseshoez

I agree completely.

I gladly and willingly started back with secured cards. It - for me - was no ego hit at all. It was a foot in the door (I went a few years with no credit cards simply because I did not want any). And I did not care how my foot got back in the door....all I knew was that I was back in! :-)

For lots of people it seems to be an ego hit (may not be the right words or analogy....just my phrase here).

Where I hesitate, though, is that for *most* people (I think that I am okay saying this....dont really have any available data to back it up, though) the cost of entry (namely, the $2,500 to $5,000 'deposit) is far too high. Shoot, what is the statistic? For some 80% of people in the United States an unexpected expense of $400 is a financial impossibility? Something like this, right? That is my only hesitation here. Otherwise, I agree completely.

Re: Advice Needed. Post BK

Horseshoez — Sat, 25 Sep 2021 13:47:26 GMT

@HowDoesThisAllWork wrote:
Shoot, what is the statistic? For some 80% of people in the United States an unexpected expense of $400 is a financial impossibility?

Wow, didn't know that; scary statistic!

Re: Advice Needed. Post BK

HowDoesThisAllWork — Sat, 25 Sep 2021 17:48:41 GMT

@Horseshoez wrote:
@HowDoesThisAllWork wrote:
Shoot, what is the statistic? For some 80% of people in the United States an unexpected expense of $400 is a financial impossibility?
Wow, didn't know that; scary statistic!

Yes, sir! Uh, assuming that you are a "sir"! If you are a "ma'am" then please please please forgive me! :-)

Not gonna lie....I was part of that statistic for far too many years. Now, by the grace of God, I am a tiny bit ahead of that "statistic". All because of budgeting.

Not gonna preach too much (but I will a little bit here) but budgeting has change my financial life. I just received two "major" unexpected expenses:

1. some $200 in back property tax for my car [paid it and was relieved that the county in which I used to live found that and took action on that (I have an aversion for paying "property tax" on my car....dont know why I do, but I do! LOL). Kinda surprised that it took them so long to find it and to take action on it but props to the good folks at FC for running that SQL Query and finding me!].

2. some $800 car repair (paid it and was somewhat disappointed because that amount was about the amount that I had in my "New Car" category....thought "well, that sucks. Not how I wanted to spend that money but gotta roll with the punches here").

I promise you two years ago I would have drowned financially by either. And both of them hitting with two weeks of each other? Dont even want to think of what choas that would have created two years ago.

So, my point here: budgeting and this forum can really really really make a difference in one's financial life.

Re: Advice Needed. Post BK

Horseshoez — Sat, 25 Sep 2021 19:25:34 GMT

@HowDoesThisAllWork, I have to admit, even after enduring two small business failures (long stories seen elsewhere in this forum) and gone through a Chapter 13 (dismissed early last year, will fall off my record early next year), I don't budget, never have, and probably never will. That said, I've recently become one of those lucky few where my monthly living expenses, you know, roof over the head, utilities, food, clothing, insurance, car expenses, and the occasional dinner out, only amount to about 17% of my monthly income. Without even really trying, I'll have enough saved by next summer to plop 20% down on a new home and still have a fair amount left over.

Re: Advice Needed. Post BK

Dhani76 — Sun, 26 Sep 2021 05:34:29 GMT

When my lawyer told me to stop paying I felt bad because I only had CapOne ($750) & AMEX ($500) & paying them off was do-able & I had decent relationships. I reaffirmed my car loan. Should I have called them & reaffirmed the cards?

Re: Advice Needed. Post BK

Horseshoez — Sun, 26 Sep 2021 13:26:50 GMT

@Dhani76 wrote:
When my lawyer told me to stop paying I felt bad because I only had CapOne ($750) & AMEX ($500) & paying them off was do-able & I had decent relationships. I reaffirmed my car loan. Should I have called them & reaffirmed the cards?

I don't think there is such a thing as "reaffirming" unsecured loans of any type. As for paying the $1,250 you had outstanding on those two cards, nothing will prevent you from paying the money back even after your discharge. The next issue is getting back in with those lenders; it is a virtual guarantee CapOne will let you back in within 6-weeks of discharge; if you pay AMEX back, they will probably let you back in 61-months after you filed.