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Yep - you bet that mortgage and car loan will do you good. As long as it's paid on time and doesn't show any lates, it will help your credit history and your FICO score.
You can monitor your credit reports while you're in bankruptcy - it's not uncommon to have accounts reporting improperly and you can keep that straightened out. When you've completed your bk, you can apply for a credit card or two if you like (they'll help your score). I think it varies by state, in my state the policy is no new credit can be applied for - it can trigger a discharge of your bk. Except, of course, car loans approved by the trustee.
But paying that mortgage and car loan always on time will be golden for you. Payments in the plan don't count for your credit history - but on manual reviews (i.e. a mortgage) Ch. 13 fares better than other BK's because a good portion (or all) of the debt is repaid.
Good luck!
oldhack62 wrote:
So, there really isn't much point to constantly monitoring your credit reports. Look at your free credit report mandated annually by federal law, but don't waste money yet on a monitoring service. Good luck.
oldhack is right - you don't need to spend money on a monitoring service - that doesn't suit your needs during bk. But you should monitor your credit reports periodically - using the annual free credit report is a great choice. You also don't have to wait til the last year you're in bk to clean up credit reports. They're often full of inaccurate information (especially when you file bk) and you can get that taken care of as you move along - no need to wait and try to do it all at the end. Keep it cleaned up as you move along, and there will be less stress as you complete your bk. I had over 30 errors to correct on my 3 reports, and DH had another 30+. When we found we were in an emergency situation in the middle of BK - we didn't have the time it takes to clean them up. Having those errors on the reports prevented us from pursuing some very appropriate actions. If you find you're in an emergency situation, or you're discharged through some clerical error (happened to us) you will want those records to be correct. My advice is to be absolutely aware of what's on the credit reports and clean up errors - it's in your best interest whether you're in bk or not.
As far as improving your credit standing during Ch. 13 - payments to the trustee do not show up on your credit report. (Of course, if you do not make them, the CH 13 will be discharged and that does show up on your credit report as a discharge and stays for 7 years). Payments to your mortgage and truck loan - anything outside the BK - will help you tremendously. Make sure they are never ever late - they are gold to you right now if you pay them, and a huge negative if they are late. You are in a good position because these accounts are already in place and you can show a positive payment history on them. Best wishes!
Personally what I did was to continue to pay my mortgage and car payments and opened a $500 SECURED credit card with my bank. I paid my cellphone bill automatically every month with the CC (10% savings on bill for auto pay) and paid it in full every month to keep the card active and show activity. I didn't get a single thing until the discharge and I was at a 685. While the car payments and the mortgage will help your score, having a single revolving credit line will show that you can manage both types of credit, plus the sooner you open it the longer the "credit history" on that card will be by the time you discharge helping to build your score that much more.
As others have said, the best thing you can do if you choose not to get a secured CC is to never, ever, ever be late on your mortgage, car or trustee payments.
@Anonymous wrote:Personally what I did was to continue to pay my mortgage and car payments and opened a $500 SECURED credit card with my bank.
+1. Golden!
Very savvy (and another good reason to make sure your credit reports are cleaned up and reporting accurately).