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Ch 7 hurting worse 9yrs later?

New Visitor

Ch 7 hurting worse 9yrs later?

Hi all, new here, frequent lurker first time poster. I declared ch 7 in summer 2008 *(filed June, discharge Sept). Been working on my credit, down to 60% utilization and 650 Score, in fact in January bought a new car for the first time ever!

But the past yr, applying for CCs I get denied based on "serious delinquency" which is the bk. I thought this close to it coming off it wouldn't be a factor. But someone told me it actually hurts worse now because as soon as it drops I could theoretically file for bk again (obviously not going to) and so creditors are scared? I get this rejection reason when applying for CLIs as well. Anyone have experience with this scenario?
Message 1 of 7
6 REPLIES
Community Leader
Senior Contributor

Re: Ch 7 hurting worse 9yrs later?

I think the 60% utility is playing a part. As the creditors see it, you could file ch7 again and that a big risk. 

Since your Bk will soon be off your reports, I would just wait until it does and pay down balances in the meantime. 

Just think how much rewarding it will be to app for credit w/o the Bk and low utility! 

AMEX PLATINUM, DELTA PLAT & SPG | PenFed PR | NFCU FS | Discover IT | CAP1 VENTURE | LOWES l NORDSTROM I MACYS I WAYFAIR I
Message 2 of 7
Valued Contributor

Re: Ch 7 hurting worse 9yrs later?

A lot of times the reasons they give for denial aren't even the real reasons. I think the BK + your high utilization is what's spooking them.

 

Also, what CC's are you applying for? Some banks aren't BK friendly and will automatically decline because of it. (Some of these will approve you, but you have to call in and recon.)

 

Having 60% util, buying a new car, and applying for more CCs is dangerous territory. You're about to be golden when this BK falls off. Take some time to work out your budget and make sure it stays that way.

Ch 7 Discharge May 2015
Discover/Target/NFCU CLOC/NFCU Cash Rewards/PenFed Power Cash Rewards/PenFed Pathfinder AMEX - $60k total revolving
Message 3 of 7
Community Leader
Valued Contributor

Re: Ch 7 hurting worse 9yrs later?


@AllTheWayUp800 wrote:
Hi all, new here, frequent lurker first time poster. I declared ch 7 in summer 2008 *(filed June, discharge Sept). Been working on my credit, down to 60% utilization and 650 Score, in fact in January bought a new car for the first time ever!

But the past yr, applying for CCs I get denied based on "serious delinquency" which is the bk. I thought this close to it coming off it wouldn't be a factor. But someone told me it actually hurts worse now because as soon as it drops I could theoretically file for bk again (obviously not going to) and so creditors are scared? I get this rejection reason when applying for CLIs as well. Anyone have experience with this scenario?

No, a BK is always listed as "Public Record". Any delinquency on accounts discharged in BK would have fallen off at the 7 year mark. Even with 60% utilization hurting your score if you have no late payments at 9 years post discharge your credit score should be well over 650. Do you monitor your credit report? There could be some accounts showing late payments. CreditKarma will give you free reports for Transunion and Equifax.

And you were eligible to file CH7 BK eight years after filing, so June 2016. So there's no reason now creditors would be concerned you might file again.


Fico 08: 720/721/719 TU/EX/EQ
Message 4 of 7
Regular Contributor

Re: Ch 7 hurting worse 9yrs later?

In credit reports and related documentation, the term "serious delinquency" definitely refers to a BK if there is one listed under public records. Of my 3 reports, all are completely clean (not even a single late) but Experian still hasn't removed my BK13. Anything pulling from EX lists "a serious delinquency" as hurting my score. 

 

Your high UTIL isn't helping any, but the BK is an automatic denial for many loan apps, and will be the case until the day it disappears. But the day after that, banks will start throwing toasters at you. 

Began 5/17/17
EQ 621
TU 577
EX 608

Current FICO 8
EQ 767
TU 775
EX 728 - FINALLY ALL ABOVE 700!
Message 5 of 7
New Contributor

Re: Ch 7 hurting worse 9yrs later?

I agree w DaveInAZ and other posters.
Just wanted to share my experience and DPs. My BK7 was discharged in ‘09.
It is listed as a “public record” on all three bureaus as the only derog. Payment history has been perfect. So it is interesting about yours denoting “delinquent.” On my EX report, it states “public record” will soon fall off.
I’m hoping that once it does, my scores move in the positive direction. I’ve read mix stories on MyFico, and in worse cases a significant drop of up to 70pts after it does. Yikes. My guess is that if someone continues to seek new credit and keep utilization high, it might have that effect because there are many other factors other than the BK showing.

I find that the biggest swings in fico scores for me is utilization. Scores usually run low 700s if I am between 30-50% util and about 730-40 if util is below 30%. AAoA is 6yrs, oldest account 13yrs. I was in the garden for 6yrs from 2011-2017. And recently just became smart about stock piling points thus have open two new accounts since Feb this year. My fico went down from 745 to 725 because of the inquiries and new accounts. I’m confident it’ll bounce back in a few months. It just takes time.
Hang in there! Just bring utilization down and garden for a while.
Message 6 of 7
Community Leader
Valued Contributor

Re: Ch 7 hurting worse 9yrs later?

And I agree with marmaladepie.

I filed BK7 Sept. 2010, discharged 1/31/2011. My Fico reports used to contain "serious delinquencies" when the accounts I included in BK were still on my report. Once they fell off at the 7 year mark that "delinquencies" disappeared and my payment history is 100%, my BK is only listed as a Public Record. Incidentally, my EX reports also say the Public Record will "soon be removed", but I think they're overly optimistic, I'm no expecting it to be removed until around June 2020.


Fico 08: 720/721/719 TU/EX/EQ
Message 7 of 7