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Please help : Am I doing the right thing.

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Anonymous
Not applicable

Re: Please help : Am I doing the right thing.

Thanks for the reply.  Our old vehicle is the wildcard at this point.  IF it makes it, we will own it outright (cramdown through the plan).  I cant imagine its going to be worth much.  But heres hopin.  As for the 13, we are single income and were able to get the 36 month plan thank god.  Its been a long road so far, but we are just over half way done.  We have just about everything set to auto-pay and I intend to let it stay that way.  

 

And yes for the general masses, its very frowned upon to get any new debt during the 13 without trustee approval.  Luckily our trustee has established limits to what you can do and they are pretty resonable.  Having a $300 CC is really nothing at this point.  Now if it was a $3000 CC, then yes you could get into big trouble with that both personally and legally with the 13.  

Message 11 of 29
TRC_WA
Senior Contributor

Re: Please help : Am I doing the right thing.


@Anonymous wrote:


Simply I wanted to know from experienced people if by gainning perfect payment history on a CC and a personal loan during the life of the 13 will help more or less or not at all at the end.  As for the cash from the personal loan, its being used to pay that personal loan back.  Not because we really needed it. lol


As I told you in my first response... I didn't open any accounts and I turned out just fine having opened the new CC and car loan the same week I got my discharge.

 

Don't lose sleep over thinking you need to have a open CC and installment loan to improve your credit... you don't. 

 

I did have an open installment loan (my  $10k car at the time, $225 a month) that wasn't included in my Ch 13 plan.  I kept the payments up in addition to my 13 payment and the court gave the OK. 

 

I had no open CCs over the 4 years... and turned out just fine.

FICO8 current as of : 4-17-24 EQ: 724 TU: 707 EX: 706
Hard INQs last 12 months: EQ: 5 | TU: 8 | EX: 9
Verizon Visa $8500 Amex Delta Reserve $10,000 Care Credit $18,000
NFCU CashRewards $7500 Apple Card $7000 Best Buy $8000 Amazon $5000
NFCU auto loan (2022 Ford Bronco Sport Badlands - Cactus Gray) 6.95%
NFCU motorcycle loan (2024 Harley Davidson Road Glide - Alpine Green & Chrome) 9.45%
Total CL: $64,000 --- Total CC UTI: 27% --- AAoA: 5.5 years --- Income: $200k
Last app: 4-6-24
Message 12 of 29
Anonymous
Not applicable

Re: Please help : Am I doing the right thing.

See now I think that open auto really helped you too especially for getting another auto loan.  I know that banks in regards to auto loans weigh older auto loans much more than past mortgages and CCs.  So I do have that going for me too.  We have an open auto thats being paid in the plan (trustees requirement), not by choice.  And it was perfect too before it was included.  And once this is over, we will be getting the title for the vehicle.  So who knows.  Its not reporting though to the CRAs at the moment because its in the plan.  Thats not helping the scores, but Im hoping they will report the remaining payments after discharge.  

Message 13 of 29
TRC_WA
Senior Contributor

Re: Please help : Am I doing the right thing.


@Anonymous wrote:

See now I think that open auto really helped you too especially for getting another auto loan.  I know that banks in regards to auto loans weigh older auto loans much more than past mortgages and CCs.  So I do have that going for me too.  We have an open auto thats being paid in the plan (trustees requirement), not by choice.  And it was perfect too before it was included.  And once this is over, we will be getting the title for the vehicle.  So who knows.  Its not reporting though to the CRAs at the moment because its in the plan.  Thats not helping the scores, but Im hoping they will report the remaining payments after discharge.  


Yeah my auto loan wasn't included... and reported the entire time... and still does after having traded it in 2013.  Sure it helped my auto FICO... which was as said 703 when I bought the Challenger (my FICO 08 EX was around 680 at the time)...

 

Lots of people are like "OMG I just filed Ch 13 now I need to rebuild while I am in the plan so I'll be good when I get my discharge!"

 

Speaking from experience... no you don't.  CC's affect your FICO a whole lot more than installment loans... and not having CC's didn't hurt me in any way, shape or form.   My CU told me at discharge when I applied for their card "come back in 6 months after you build some history... in the meantime try Cap One" so I did just that... opened the Cap One card... came back in 6 months and got a $7500 CU card at 9%... that is now $10k.

 

I started small and worked my way up with CCs after discharge... which was to be expected.

FICO8 current as of : 4-17-24 EQ: 724 TU: 707 EX: 706
Hard INQs last 12 months: EQ: 5 | TU: 8 | EX: 9
Verizon Visa $8500 Amex Delta Reserve $10,000 Care Credit $18,000
NFCU CashRewards $7500 Apple Card $7000 Best Buy $8000 Amazon $5000
NFCU auto loan (2022 Ford Bronco Sport Badlands - Cactus Gray) 6.95%
NFCU motorcycle loan (2024 Harley Davidson Road Glide - Alpine Green & Chrome) 9.45%
Total CL: $64,000 --- Total CC UTI: 27% --- AAoA: 5.5 years --- Income: $200k
Last app: 4-6-24
Message 14 of 29
Anonymous
Not applicable

Re: Please help : Am I doing the right thing.

Im very excited for the future.  I have been up and down in terms of credit worthiness for a long time.  That housing market crash killed us financially for the last 10 years.  Before filing the 13, we were still dealing with the history of that.  No more.  Now we are just normal, and Im working a great job without the pressures I had before.  Once this is over, then its finally time to get that forever home we need for our family.  Also maybe take a vacation at some point...lol  But I guess you could consider what Im doing as gardening as you guys say here?  I have to get up on the lingo.

 

Im worried about Capital One too.  Had to burn them on the last 7 and now on this current 13.  Im sure Im blacklisted.  Maybe Barclays will have mercy on me.  Im going to start a relationship with my local CU soon too so maybe that will help the cause.  They have no products for open 13s but once Im out they said as long as Im re-established they would do a nice CC.  Then I will hit them up for atleast one of the car loans.  They do like 1.79% for 75 on 1-2 year old cars if you are 700+ score.  Thats what Im shooting for.

 

Thanks for all your help too people.  It feels good to read the comments and stories of those that have been here before me.  And it makes me feel better to know Im not the only one that has gone through this.

Message 15 of 29
TRC_WA
Senior Contributor

Re: Please help : Am I doing the right thing.

http://ficoforums.myfico.com/t5/Credit-Cards/Garden-Club-March-2016/td-p/4478542

 

That tells you all about "gardening."  Just hit a year for me...

 

I wouldn't worry about Cap One.. .they are one of the first lenders to give people a 2nd chance.

 

Unfortunately Barclays isn't as forgiving.

FICO8 current as of : 4-17-24 EQ: 724 TU: 707 EX: 706
Hard INQs last 12 months: EQ: 5 | TU: 8 | EX: 9
Verizon Visa $8500 Amex Delta Reserve $10,000 Care Credit $18,000
NFCU CashRewards $7500 Apple Card $7000 Best Buy $8000 Amazon $5000
NFCU auto loan (2022 Ford Bronco Sport Badlands - Cactus Gray) 6.95%
NFCU motorcycle loan (2024 Harley Davidson Road Glide - Alpine Green & Chrome) 9.45%
Total CL: $64,000 --- Total CC UTI: 27% --- AAoA: 5.5 years --- Income: $200k
Last app: 4-6-24
Message 16 of 29
Its_Me
Regular Contributor

Re: Please help : Am I doing the right thing.

Our Ch13 was discharged August 2014 and I got a car loan to buy my daughter a used car February 2015 at 4.99%. Not the best, not the worst rate. I did not try at a credit union.

Message 17 of 29
TRC_WA
Senior Contributor

Re: Please help : Am I doing the right thing.


@Its_Me wrote:

Our Ch13 was discharged August 2014 and I got a car loan to buy my daughter a used car February 2015 at 4.99%. Not the best, not the worst rate. I did not try at a credit union.


Mine was 4.49% in January 2015 with a local CU and I didn't complain.  EX FICO was 680, FICO auto was 703... the car was $40k, and I didn't put anything down.

 

I'll probably refi soon... my home CU best rate is 1.99%.  At the time of purchase my home CU declined me... only offering 28k because at the time my high auto loan was 20k.  Here we are 15 months later and I believe I have the payment history now that will make them happy to refi for me.

FICO8 current as of : 4-17-24 EQ: 724 TU: 707 EX: 706
Hard INQs last 12 months: EQ: 5 | TU: 8 | EX: 9
Verizon Visa $8500 Amex Delta Reserve $10,000 Care Credit $18,000
NFCU CashRewards $7500 Apple Card $7000 Best Buy $8000 Amazon $5000
NFCU auto loan (2022 Ford Bronco Sport Badlands - Cactus Gray) 6.95%
NFCU motorcycle loan (2024 Harley Davidson Road Glide - Alpine Green & Chrome) 9.45%
Total CL: $64,000 --- Total CC UTI: 27% --- AAoA: 5.5 years --- Income: $200k
Last app: 4-6-24
Message 18 of 29
Its_Me
Regular Contributor

Re: Please help : Am I doing the right thing.

Hopefully I can get something close to 1.99% when I purchase next January. I did try the capitol one prequal this past month and did get an estimated rate of 2.49% depending on the age of the vehicle and term. I also tried DCU last month but was denied due to the CH13. I don't absolutely need a new car right now but my current SUV is 10 years old so its just a matter of time.

Message 19 of 29
Anonymous
Not applicable

Re: Please help : Am I doing the right thing.

ok well, since you asked.... buying a 45k car on a 75k salary strikes me as excessive and brazen.  especially for someone fresh out of a bankruptcy.  

 

from a personal finance perspective you're wise to rebuild your credit in anticipation of a home purchase, but borrowing money you don't have to buy vehicles that cost more than 50% of what you make in a year is foolish, IMO.  i have been in bk too, and i don't ever want to be there again, so my future car purchases will be made in cash, and i won't spend more than 20% of my annual salary on one.  it's just a car.  your mileage may vary.  

Message 20 of 29
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