Looking for help rebuilding

[ldyredd27]

Hello, I have been reading many threads and tips/tricks. I believe my situation is a little different and want to get some advice. 

My husband and I joint-filed CH7BK in April 2023. Discharged 7/2023. In BK, we burned multiple credit cards.

Me: NFCU Amex $5000, NFCU secured $200, Cap1 $1500 (Quicksilver & platinum), Credit1 $300, Destiny $300, Indigo $300, MilStar $1900, FingerHut $1000, First Premiere $700. Husband: Cap1 $500, Credit1 $500, MilStar $4000, FingerHut $2500. We were doing really well until loss of job during COVID, and then used CC to survive until both jobs were regained. 

Since discharge, we completed a preapproval for VA mortgage. (I know we cannot buy for 2 years. Just wanted to know what our income could afford as we begin rebuilding and planning). We were approved for $375,000 but given an earliest closing date of 7/25/2025 due to BK. The loan officer said in 12 months we can resubmit the pre-approval and the amount will most likely increase provided our scores have improved and inclome has not changed, unless increased. 

Currently I have:

Self Lender credit building loan 

Self Secured CC $225

Discover It Student Cash Back CC $500 (Just approved today)

Husband does not have any CC or loans at the moment. We are going to open the Self Lender account for him at the end of this month. 

He was denied for any discover products today. 

Is there anything else that I/ He/ We can do to better raise our scores during this Post Bk season period? 

[Horseshoez]

@ldyredd27, here are a few suggestions culled from the experience my wife and I ran into following our separate bankruptcy filings (we were separate at the time, she filed a Chapter 7 in 2014 and I filed a Chapter 13 in 2015):

• She started with a small unsecured card from Merrick Bank; the card was a low limit and had an annual fee; after that card had aged somewhere between three and six months she was able to open up a Banana Republic card, a CapOne Quicksilver, and one other card which I forget what it is; once those three cards were in hand she closed the Merrick card.  In 2016 she was able to qualify for a car loan on a new Mazda; the lender was found by the dealership and I believe was a local credit union; the car is now paid off.  Just this month all of her credit reports came back clear of the bankruptcy notation and her scores appear to be up in the 800s.
• In my case I went nearly 7-years in credit-prison as I had to stop using the cards I used to have nearly two years before I finally filed, and my Trustee didn't allow me to get so much as a secured credit card for the duration of my 5-year Chapter 13.  When my discharge came through I failed to do my proper research and rushed right out and applied for a bunch of cards; in the first 9-months I racked up 18 hard pulls and only had one secured credit card to show for my efforts.  The good news was I had no use for a low-limit card, so the secured card I started my rebuild with had a $5,000 limit, and while I have no solid evidence to back this next statement up, I believe my relatively fast rebuild was due to having that moderately high credit limit card.

A few additional comments:

• There is a much repeated adage here at myFICO, "Rebuilding credit is a marathon, not a sprint"; take your time, it will happen.
• Secured credit cards, while not the only way to rebuild, are in my opinion the best way to start; once you have a card with a reasonable limit, regardless of whether it is secured or not, other lenders seem more open to approving you for a card.
• If you go down the route of the bottom feeder cards with annual fees, only keep them until you are able to get better cards, and then close the annual cards; they've served their purpose.

Good luck and keep us posted.

[Guyatthebeach]

@ldyredd27,

When I was doing my rebuild, I based my rebuild on SoulMaster's Plan to 700 in 24 months. The thread is still on the forum. It worked for me and a lot of others. 

Here are my suggestions for you and your husband:

1. Find a local credit union that is bankruptcy or credit rebuilding friendly. I know NFCU is not an option. Just look around, you will find one. Get a secured loan in you and your husband's name. It will definitely help both of you. Your husband should apply of a credit with them. Even if it's a secured card, he should take it.

2. For you, since you already have the unsecured Discover card, do not get anymore secured credit cards. Wait until you have 6 months of positive payment history, then try to get a third credit card for yourself. Check CapitalOne for a preapproval once a month. Some people get approved immediately after their bankruptcy discharge, some longer. CapitalOne is forgiving.

3. Use the AZEO method on your credit cards. Make sure one card reports with a zero balance and the other with a 10% balance.

4. Create 2 different savings accounts at a different bank or CU that use for your everyday banking. Have one account for emergencies and the other for the down payment for your house.  Save what you can even it is only $5 a paycheck.

Credit rebuilds take time, effort, and patience. You both can do this. In February, it will 13 years since my chapter 7 bankruptcy discharge. Today I have over $600k in unsecured personal credit and $1 million in business lines of credit, and a truck loan. My utilization is less than 1%. If I can do this, so can you. Just give yourself the time. 

Keep in informed on your progress.

Guyatthebeach

[ldyredd27]

Thanks. Currently I do have a checking and savings with PenFed and a checking with BMO. 

We will look into getting a personal secured loan and then finding him a secured card.

Thanks for your input.