Post Bankruptcy credit rebuild

[Raydio85]

Good Day, I need help rebuilding my credit after my ch 7 bankruptcy last August. I'm credit is super low like 550-590 range and I'd like to try and buy a car buy the end of the year. My mentality and my life situation has changed for the positive in the past few months since then, I have good paying job and doing well for myself  overall. I just need a good strategy to get to get me closer to 600-700, so it can help me when I go buy a newer used car in the future. I drive a 20 year old toyota it's hanging in there but I know it's time for an upgrade. Thank you in advance for the help. 

[JoeRockhead]

If you could give some more details about what credit you currently have it would help get you some better advice:

• Do you current have any open credit cards?
• If so what are the limits of each, and what kind of balances do they have?

[Raydio85]

I have no open credit cards, loans or anything. I discharged all my debt during my bankruptcy which were a predatory loan, and 2 maxed out navy fed cards over 20k. I'm just looking to start fresh and need guidance on where to go or apply.

[MyAZLawyers]

Credit scores mainly look at what you’ve done recently, so recovering from bankruptcy means building new, positive credit habits. That could be opening a secured credit card or a small loan, keeping your debt low, and making sure you pay on time. Having a steady job and a stable home also helps.  Above all, patience is necessary, as the most improvement occurs 1–2 years after bankruptcy with consistent credit use.

[FicoMike0]

You need open accounts reporting paid on time. Capone seems to be bk friendly and they have preapproval..  Secured cards work fine, even low limit. I'd go only with preapprovals, you don't want any more hps than necessary. Myself, I'd go with secured cards from major banks or credit unions rather than the fee pirates.

Ideally, you want three bank cards, do azeo and manage reported utilization. The problem is, you'll have better chances of approval if you space apps out over many months.

You may not get where you want this year, but the sooner you start, the sooner you get there.

[jetsfan2013]

You may want to consider a secured card to get things going first.

Capital One and Open Sky come to mind.

[Minimalist]

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@MyAZLawyers wrote:

Credit scores mainly look at what you’ve done recently, so recovering from bankruptcy means building new, positive credit habits. That could be opening a secured credit card or a small loan, keeping your debt low, and making sure you pay on time. Having a steady job and a stable home also helps.  Above all, patience is necessary, as the most improvement occurs 1–2 years after bankruptcy with consistent credit use.

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Not just positive credit habits, but positive financial habits overall.  Once I file I won't even bother looking at another credit card for at least six months after the filing date.  During which time I will learn to live off cash.  

In most cases bankruptcy is the consequence of getting yourself in trouble with credit, collections or medical bills, in my case all three.  The trick after filing is create better habits, budgeting, living below your means, learning to live off cash for at least the first few months, and start saving and putting together some emergency cash reserves and sinking funds so you can avoid having to file again in the future.  Once you've obtained credit again, don't use it for anything you don't have the money for. Certain budgeting programs, like YNAB, allow you to differentiate between cash and credit spending. 

While I'm not a huge Dave Ramsey fan, I do share his sentiment that there are those who have no business being anywhere near a credit card, and should just use cash to get through life.  You see people on these boards who treat credit as status symbols and not the forms of payment they are, then they wonder where it all went when you lose a job and the bills don't stop coming due. 

[goodkredit]

I'm 5 years post-bankruptcy and now my credit is the best it's ever been. About 3-6 months after the bankruptcy, I got the Capital One Secured card. Three months later, I got the Discover Secured card. (I avoided any store credit cards and cards like Credit One etc) I stuck with these 2 cards until they were moved to unsecured. It took maybe 1.5 years but my credit improved tremendously. Once the cards were un-secured, I applied for additional unsecured cards. Make sure that you've studied how you typically behave with money and your bad habits before applying for a card. I had a long hard talk with myself. I went from avoiding to pay my credit cards to loving to pay them and seeing the balance decrease. It's really a mind thing. 

[lagirl86]

Hi, I see that you have some good number of Citi cards. I'm 3 years post BK7. Credit score 730-740 now. I have Capital One ($10K), Credit One (two of them, and I don't like them at all, bot at around $1,500, I really like to close them as I hate their fees bit will wait a bit ), Ally Card ($8,000) and Secure US Bank ($2,000). I'm thinking about Citi which I did not burn with the BK7, how easily do they approve you? Which one is good for travel miles and no fees?