2 year bankruptcy mark..file or discharge date?

[LindaLu]

Everyone talks about that 2 year after bankruptcy date and score going up a little and/or the less effect it has on your score and the less creditors consider it .  Is is 2 years after you file or 2 years after the discharge date?

My bankruptcy was chappter 7 filed may 2007 and discharged aug 2007...some say it makes a difference if it was chapter 7 or 13..is that true also?

[Anonymous]

I just used a free trial program for all 3 credit scorings and each one of them said since I haven't had a bankruptcy in the past two years this has helped my credit.  Each of the three reported that.  So to answer your question, it does help.

Mine was in 11/05 ch 7. 

I think I've got $38,00 credit now, utilizing only 11.5% and paying it down fast.  Credit is 689, 693, & 718 for Experian Plus, the better one.  That's a 700 average. 

Mike

[Anonymous]

All things BK are based upon the date of discharge for a 7.  For 13 it is two dates:  first the date your payment plan is accepted and then when when discharged (meaning pay plan is completed).

[Anonymous]

I am glad that you asked this question. I was wondering the same thing.  I guess that means I am not even a year out of my bankruptcy. Discharge date was August 12th 2008. Do we a get a point or two after a year. 

[Anonymous]

edconsumer,

Your score will depend on what you report looked like before your BK, and how responsible you have been since the discharge date. The # cards, type of cards & limits you have acquired, and a mortgage helps, no late pays, and low utilization rate all play into your score.  The more you can do now will be reflected when you hit the 2 year mark.  Don't expect a sudden jump.  Each of the big 3 report differently too. Mine has been gradual, but the scores are increasing the longer the 2 years are seen in the taillights.  The new FICO scoring being considered should help with some late pays.  Scores are quick to fall but slow to rise.

[Anonymous]

I won't have a mortgage until I get past the two year mark but I am doing everything that everyone on this site has recommended.  I only have $1500 in credit with essentially no debt. One secured from a credit union and a Capital One Credit Steps, and Orchard. One Auto loan of 8K originated in 12/08 made $3500 DP and no lates since the bankruptcy.  I am glad to know that gradual isnt so bad.  This site is deceiving there are these people with FICO scores jumping 80-100 pts in a couple months. It's hard to watch when you are creeping along. My Auto Loan and Secured CC are only being reported to EQ which explains the score difference from the other two CB's..

[Anonymous]

Edconsumer,

I would contact the other two credit reporting agencies and update your credit with them.

If your bk won't be up until 2010 and you want a mortgage, I would look for an owner finance purchase.  This is a fantastic way to get the interest deductions for the IRS and when you finally do get your scores up high enough for a mortage, you will have this owner finance as a credit source as well and the under writers will take that in consideration.  It will still take more time after the 2 year mark to get your scores high enough for a mortgage loan with decent rates.  You won't get any points with the reporting agencies because an owner finance won't be reporting to them.  It can help in obtaining more credit with letters from the seller.  Local Credit Unions are great for accepting these letters in obtaining credit.  You might consider the CU as a lender as well if you maintain a good relationship with them.  After you qualify for a mortgage, re-fi and go with a low conventional loan.  An owner finance will run between 7 to 10%.  High interest, but great tax deduction.  Make sure the attorney who draws up your paperwork  includes a no penalty clause for early payoff.  Get a title policy.

[Anonymous]

Hi Audio,

My bk discharged in July 16th 2008.  I have been told that in order to qualify for FHA I will need a score of 620 mid score out of bankruptcy.  The interest rate for FHA is the set at the market rate.  My EQ Fico is 640 so I am confident I will qualify in 14 months.  Thanks for the tip about reporting.  I had no idea that I could contact the credit bureaus and have my loan and secured card added.

[Anonymous]

OK turns out you cannot contact the CRA and request to have information that is not reported added to your file. There CU has to have an account with the CRA.  Looks like I am just not going to be able to have my secured CC and auto loan reported anywhere but EQ.

[Anonymous]

Educated Consumer,

No, if they aren't a member they can't report, just like the owner finance.

But that's ok.....(I've been in real estate for many years until a year ago.)

Mortgage companies will look at your credit with the CU, any fixed income like a rent house, child support, alimony, and other things, all which aren't reported to the CRAs.  Your CU will be able to provide the lender the documents you need to verify your credit.  Once underwriting gets the file, they look at everything.  They understand that the CRAs are only a part of your credit worthiness.

I would look at going to Best Buy, Frys, or similar and get one or two of their cards.  These will show up and are usually easy to obtain.  Walmart Discover is supposed to be easy to get as well.  Just use them from time to time and pay them off.  I would leave pay the minimum for a month or two, then pay them off in full.  If you make a charge on a card, then pay the balance in full when you get your statement, it may show up as -0- balance with no use.

Your credit scores look good enough to get a couple of these cards even though the limits may be low.  So what.....

Don't make any major purchases if your objective is to get a mortgage.

Good luck,

Mike