At a loss with the rebuild process

[Anonymous]

Hi there, I want to first start off with this is my first post and this forum has really helped me deal with my bankruptcy. My chapter 7 was a pain. There were several continued meetings and an extension to object but I did received my discharge on March 18th, and my case was closed the following week. I know it is still fresh but I am having trouble understanding the rebuild process. My credit was pretty bad before my chapter 7. I tried to salvage what I could and work to rebuild before filing but it didn't work and filing was my only option. 

I see people on here getting the fresh start if you will but it seems like when I try to do a soft pull for anything I get declined with showing all of the negative stuff before my discharge. My discharge does report now and all of my accounts look like they are reporting correctly. I guess my question is will this change over time? I did open a Chime account and I am waiting on their credit builder card to unlock after my direct deposit. I also set up a self credit builder loan and at some point soon I think my student loan which is current should show back up. Is there anything else I need or can I rebuild with just this mix of accounts? I'm in no rush to have massive credit lines with prime cards or anything like that, I just want to make sure I'm starting off right with this second chance I was given. 

I let depression and medical issues allow me to make terrible financial choices and mistakes in the past and I just want to start back up in the right direction. Thank you! 

[pizza1]

Hello and welcome!

First, what lenders did you burn in your BK?

Next, pull all three of your reports, and go thru it with a fine tooth comb. Make sure all accounts that were IIB (included in bankruptcy), state $0 bal/and a notation of "IIB". Also, make sure your BK in the PR section (public record), states "discharged, and the date of DC.

Sometimes that can take up to 30 days for your reports to accurately reflect it all.

Dont go applying all over the place to everyone. There will be lots of lenders you won't be able to get for many years, that why I wanted you to list out who you burned in your BK. We can go from there.

[Guyatthebeach]

Frank41682,

Welcome to the forum. The myFICO community is the most friendliest and helpful community you will ever meet. If it weren't go this group, I'd still have only a secured card and driving a 20 year old car.

Just like pizza1 said, check all your credit reports to make sure to everything is reporting correctly before you start rebuilding. Also list the lenders and credit cards you included in your bankruptcy. We can all give you some guidance so you don't make the same mistakes we made.

Something else you should do is read Soulmaster's guide to 720 in 24 months. I couldn't follow it to the letter, but I used it as a roadmap for my  rebuild. Also create a budget that works for you and start a savings plan that will help you prevent getting back into situation that caused you to file bankruptcy.

I'm living proof that it can be done. November 2021 will be the tenth anniversary of me filling Chapter 7.  Right now I have around $380k in unsecured credit card, $500k business line of credit, and truck loan with almost the lowest rate I've ever had. Trust me, if I can do, so can you.

Hang in there, you can do this!

Guyatthebeach

[kittycreditmeow]

Congrats on your discharge, sounds like a rough process you had to go through. You came to the right place. Lots of knowledgeable folks around here and if you skim or search the forums, you'll find lots of other relatable questions or info. 

I was discharged 17 months ago and I'm still rebuilding. It is a very slow and steady process. It will take time. I think doing the self lender loan is a good start. I also have chime and just got the chime credit builder card a week ago so I have yet to see how it reports or if it changes my score any. I would also recommend getting a secured credit card. Try milestone or opensky if you can't qualify for discover. Fingerhut fresh start is also good credit rebuilding option. There are also lots of subprime credit cards. (CreditOne, First Premier, Indigo, Surge and more).

Not sure if Capital One was one of the creditors you burned but they were the first to give me an unsecured credit card fresh out of BK discharge. It was not for much, just $300 but it was something to get started. See if you prequalify for any of their cards. 
 
My rebuild has been a little bit slow as I still don't qualify for discover, chase, BOA, synchrony or any of the other top credit card lenders. One thing this forum has taught me is that it isn't a race, it's going to take time and if you do it right and have patience then eventually you will get back in those you burned. 

[chalupaman]

If you can get a secured CapOne card (mine was the one where I only paid $49 for the deposit and no AF so it was easy to sock drawer when I didn't need it anymore, and it did eventually get a CLI to $500) and something like a MyJewelers and buy something very inexpensive (the cheapest thing you can find) with it and let that report, those would be options to consider as well or as an alternative, you can do the same thing with a Kay Jewelers and go from there once your scores a bit higher. Open Sky is another secured card I'd recommend if CapOne or Discover (assuming that was not IIB) don't approve you.

Do whatever you can to avoid having any cards with First Premier or Credit One for sure. The reason I also recommend it despite the AF is you get a pretty high limit to start and that's going to make it easier long term to get better starting limits on your next cards. 

With all those, you're all set to rebuild. Two secured cards, the Self Lender loan, and that should be more than enough to get started if you can. Think about the limits you'll work with, and aim for a most 10% reporting on one of them for the most impact. In six months, your scores should be in the 630s or even 640s and you'll start getting prequalified offers for stuff like the Ollo and Mission Lane cards in Credit Karma. Definitely take those and keep building from there and let your accounts age for the rest of that year. Into your second year, that's when you'll find that you can get approved for more unsecured stuff and I mean with pretty great limits. Just be patient and don't get trapped into feeling like you have to apply for everything under the sun just because lenders are cautious at the beginning. Also don't worry if after a while your score growth slows down for a long while. That's normal too. Just keep using the cards the way that they should and you'll be fine. 

The other big thing I recommend you do is start to establish relationships with credit unions that might be able to help you in the long run, like Penfed, Alliant, DCU, your local credit unions, etc. You might be able to get products from them once you're closer to the 2 year dicharge period. If you're lucky and you qualify, go for NFCU, which I've heard so many good things about here. 

[Horseshoez]

@Anonymous, one anecdote you will see here, and on pretty much every other forum helping folks recover from bankruptcies, "Rebuilding credit is a marathon, not a sprint."

Like you I started applying for new credit shortly after my Chapter 13 discharge (and before I found this site) last year, bad move; I racked up 8 hard pulls in the first six weeks; all I had to show for all of those pulls was a single CapOne secured credit card, one which I hated so much I closed it after 6-weeks.  Had I simply cooled my heels for a couple of months and done some research, I would have 8 fewer hard pulls and probably higher credit scores.

I guess I'm trying to suggest my experience as something of a metaphor for you; slow down, do some research, and plan your next moves strategically.

[pizza1]

Before you do anything....list out your lenders here first. If you already have a loan reporting....(mortgage, student, car), you DO NOT need to get another loan, or the Self Lender loan. Avoid Creditone, Milestone, First Premier.

[Anonymous]

Thank you everyone for the kind replies and I apologize for my late reply. So far my rebuild is moving along. I curren'tly have my Student loan reporting, a self-builder loan, a chime credit builder card, two AU credit accounts one with a $2K balance and a $3K SP and the other with a $5K SL and a zero balance, and recently opened two unsecured credits with Mercury bank at $1,000.00 CL and Merrick double your CL at $1,000.00. This morning Experian  is reporting my Fico 8 score as fair at 605. Experian  is saying I have a good mix of credit now. I do have a sordid credit past following the year up to my bankruptcy filing which include several charge offs and a bunch of reported lates. I am not sure if theses are still meant to report or not after discharge. 

I have totally avoided applying for any of the lower cards and took a chance on Mercury Bank and Merrick bank after receiving the preapproval invites from them. I guess at this point I just garden with the mix I have now? Does do the AU cards count towards that or do I need to have three or my own accounts? Like would a store card help at this point? 

Also, what is gardening? making a small purchase, say a tank of gas and then paying it off each month? And is that payment made after the statement for the next month generate?

Thank you so much! this has been such a tough road for me and a learning process. I didn't understand credit and clearly I still have many questions. Unfortunately it took some health issues and a few hard knocks to help me snap out of the bad credit habits cycle.