Starting my post BK7 rebuild and need some advice - did I just screw up right out the gate?

[mrspock08]

Hi all,

First off, thanks in advance to all of the contributors here who've been a great help to my long-term lurking self, and I'm sure many, many more of us long-term lurkers over the years. 

I'm just starting my rebuild after my BK7 discharge, and I'm thinking I may have made a boo-boo right out the gate. To preface, I've gone ahead and read SoulMaster's excellent BK7 to 700 in 24 months thread, as well as looking through the BK friendly credit cards (pt 2) thread from Scupra.

As background, I burned the following in my BK7 (filed 2/6/17):

• Capital One (old Orchard card, as well as 2 Cap1 cards)
• Credit One
• First Premier
• Bank of America
• Barclay's (Barclaycard Rewards)
• Synchrony/Amazon
• Synchrony/WalMart
• Synchrony/JC Penny
• Wells Fargo
• Santander Consumer (Car Loan -- didn't totally burn them, I'm redeeming the car w/ cash, but the car loan TL has disappeared from all 3 of my credit reports)

I received my discharge on 5/31/17, and while I have access to monthly 3B CR's through my membership with Associated Credit Union, I immediately signed up for a MyFICO U3B, so I could pull my actual FICO scores rather than the FAKO's from everywhere else. Looking at my reports they were surprisingly accurate -- I'd gone ahead and sent in a few disputes while I was waiting for my discharge on TLs that were IIB but still showing as late/CO/etc with balances, and they'd been updated, so there were only a couple of things on EX that I'm disputing, and my discharge was already showing on all my CR's. 

As of 6/6 my FICO8 scores were: EQ 620 / TU 565 / EX 561. INQ's: EQ 5, TU 3, EX 4. (1TU, 1EX falling off this month)

Having read through SoulMaster's guide, and knowing that I burned CreditOne and CapitalOne in my BK7, I figured it was pointless to waste a HP reapplying with CO, and tried the prequal on Cap1 with no luck. So, since I'm a member of NFCU I figured I'd go ahead and see about getting their secured card, with an eye towards graduating it in a year or 18 months. Given how BK friendly everyone has said they are, and the fact that I've been a member, and never burned them on anything, I called them yesterday to ask if instead of applying straight for the secured card, could I apply for their GoRewards card and if I were denied for that would they be able to consider me for the Secured card off the same HP? I was told that they should be able to, and that so long as my BK7 is discharged they're really pretty liberal with their underwriting, so she's seen a lot of members fresh out of BK approved for their unsecured card. Given that, I went ahead and put in the application (over the phone, which may have been my second mistake) for the unsecured GoRewards card. Didn't get an instant approval (didn't really expect it), but got the 'submitted for review' and told I should hear something back today. I'm keeping my fingers crossed, and will send a secured message in with a recon if I'm denied, but we'll see.

So, here's my couple of questions for some of the more experienced folks around here:

1) Did I, or how badly did I, screw up by applying with NFCU unsecured to start my rebuild?  And as a corollary, should I have app'd online rather than on the phone, or doesn't it make a difference?

2) If I'm denied, when I send in a secure message for the recon, I assume I should focus on JUST asking for a recon on the unsecured card first, and only if I don't have any luck on that recon send a second message back asking about using that same HP to approve me for their secured card?

3) Does anyone have any suggestions for a good first (unsecured) card back in if I don't get approved for the NFCU unsecured, before I go for their secured?

 - I had ruled out Cap1 since I burned them in BK and didn't get any hits on the preapproval, but reading around further last night it looks like *IF* they've blacklisted me then they'd deny me without a HP, so would it worth giving them another try? I'm just conflicted on if it's worth another INQ on all 3 to try and get back in the door with them.

In terms of future plans, the only thing I'll be doing once I get this first card is picking up a credit builder/share secured loan. I've got a current installment loan that's still showing on my CR's, but it was IIB. The lender has never updated my CR's, so it's still showing as open and current, pays as agreed, no lates, but of course they haven't sent in any updates since I filed in Feb. At the moment I wasn't planning on disputing that open installment TL, since it's still showing as a positive, but if I notice that it ever gets updated to reflect a late or anything else then I'll immediately dispute it to show IIB. My thinking was so long as it's showing as a positive I'd rather leave it in the mix, until the lender updaes it (if they ever do). I do have some closed (paid off) installment loans, including student loans, but since I don't want to count on the one open one staying around on my report to keep my credit mix positive I figure tying up the $500 is probably worthwhile. Other than that, I'll be spending time in the garden.

Thanks in advance for any thoughts or advice anyone has to offer!

[Anonymous]

I've read on the board that NFCU will not approve you for an unsecured card for a year past discharge.  I applied and was denied several months after discharge (before I read that) with all scores above 650.  Your experience may be different.

[Anonymous]

I'm not sure where NFCU stand currently when approving someone fresh out of bk but from my own experience; I was approved for the CashRewards 2 months post discharge for $500 & it has since grown to $7500 today. I've also been approved for their CLOC at 5k now 12k & recently approved for their platinum for 1k. I am 14 mos post discharge.

Good luck tho!

[Guyatthebeach]

mrspock08,

Congratulations on surviving your bankruptcy and taking the steps to rebuild your credit.

Going by what you said, I would definitely try to get a credit card with Navy Federal, even if you only get the secured card. That secured card will graduate , just use it wisely and follow SoulMaster's plan. Hopefully you will get approved for it on the first HP. With NFCU, you pull your credit everytime you apply. The worst case scenario is two HP's and a recon.

Once you get NavyFederal squared away, I would talk to your credit union, Associated Credit Union. If it is affliated with Associated CU in GA, they are extremely conservative but will work with you. You may have to get a secured loan first to prove to them that you're able to handle a payment, but that will be a good thing. An installment loan will improve your credit mix, improve your payment history, and will add another needed positive tradeline to your CR.

I would do some homework on the other credit unions in your area. I'm a member of a few. I love the service I get at NFCU and PenFed, but my local CU is been the most helpfu to me since my bankruptcy. If you look hard enough you will find a CU that will help you.

Just remember this didn't happen overnight and it will not be fixed overnight. Just put a little effort into it along with some time, you will overcome this. 

My bankruptcy was discharged in Feb 2012. From a lot of hard work and using SM's plan as a template, I have over 170k in unsecured credit and 2 car loans. If I can do this, so can you!

Guyatthebeach

[mrspock08]

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@Guyatthebeach wrote:

mrspock08,

Congratulations on surviving your bankruptcy and taking the steps to rebuild your credit.

Thanks Guyatthebeach! 

Going by what you said, I would definitely try to get a credit card with Navy Federal, even if you only get the secured card. That secured card will graduate , just use it wisely and follow SoulMaster's plan. Hopefully you will get approved for it on the first HP. With NFCU, you pull your credit everytime you apply. The worst case scenario is two HP's and a recon.

Just got the message back tonight that they denied me for the unsecured, so I sent in a recon request explaining the reason for my BK and offering to send proof of income, and mentioned that if they weren't able to grant the recon would they be able to approve me for the secured card off the same HP? If not, I'll go ahead and take a second HP for it, but I figured it doesn't hurt to ask. From my POV I'd rather be in with them -- even with a secured card -- than having to search around for a bottom-feeder since I burned C1 and CreditOne. We'll see what they say -- but I've already got the funds in my checking over there to cover the security deposit, so hopefully they'll say yes to one or the other.

Once you get NavyFederal squared away, I would talk to your credit union, Associated Credit Union. If it is affliated with Associated CU in GA, they are extremely conservative but will work with you. You may have to get a secured loan first to prove to them that you're able to handle a payment, but that will be a good thing. An installment loan will improve your credit mix, improve your payment history, and will add another needed positive tradeline to your CR.

Yeah, I'm with Associated CU in GA, and that's basically what the Head Teller (who doubles as a personal banker) at my branch said when I asked about my odds of getting a card from them once I was discharged. She said I was certainly welcome to apply, but that it was very unlikely they'd even approve a secured card until 6-12 months post-discharge, which is one of the reasons I made a point of finally joining NFCU. I'm a member of one other CU in the area here (metro Atlanta, Delta Community CU), but my impression of them is that they're likely equally conservative. Either way, since I've got some savings at ACU I figured I'd probably see about using them for my share secured loan just to keep my foot in with them. Fortunately I'm in the position at the moment that I have the money to tie up on the secured card and loan, which helps quite a lot. I have a feeling it'd be a much more difficult rebuild if I couldn't set aside the money for those. 

I would do some homework on the other credit unions in your area. I'm a member of a few. I love the service I get at NFCU and PenFed, but my local CU is been the most helpfu to me since my bankruptcy. If you look hard enough you will find a CU that will help you.

I'll do some digging on the boards and online regarding the other CU's in the area here who might be BK friendly. Certainly if I find one it'll make me a happy camper. Oh for the days when I lived in IL and banked with Healthcare Associates CU. Then again everything was easier 20-odd years ago, wasn't it? 

Just remember this didn't happen overnight and it will not be fixed overnight. Just put a little effort into it along with some time, you will overcome this. 

My bankruptcy was discharged in Feb 2012. From a lot of hard work and using SM's plan as a template, I have over 170k in unsecured credit and 2 car loans. If I can do this, so can you!

Thanks for the advice, encouragement, and kudos!

mrspock08

[Guyatthebeach]

Mrspock08,

Take a look at Georgia's Very Own CU. They have a rebuilding credit card and seem to be very well received from what I had heard. 

As you are doing your research on CU's and banks in your area, check to see if their secured credit card's automatically graduate. Also some CU's and banks use a third party to handle their credit cards and loan processing. If anyone uses Elan Financial for their cards, just stop the conversation. Elan has a documented history of declining applications for bankruptcy. On one of their applicattions, it even says applications could be declined if bankruptcy is less then 2 years old.  I'm trying to start anything, just speaking from my personal experience.

While you're talking to other institutions, ask them if their loan decisions are make locally not in a central location in a different state. 

There are a lot of great resources on myfico.

BTW, how did it go with the recon with NFCU?

Guyatthebeach

[enjoimorenow]

I applied for the cash rewards and was denied with TU of 640 and was able to have them re-use the same pull for the secured card.

If you need an installment loan, deposit $500 in your navy fed savings, apply for the share secured loan.  There is no HP for this.  You can do the full $500 or the minimum of $250.  Then take those proceeds and use that to fund your secured card for $500.  It will graduate over time.

As far as CapOne, you have to be one year past DOFD.  So if your account was current when you filed BK then you have to wait 12 months after discharge.  If your account was charged off then it would be 12 months since the month that your account became late and ended up getting charged off.  Yes they will not HP you if you are blacklisted, so there is little harm in trying to app, though if you know you are still within that 12 month period you might as well wait.

My advice would be to not go for store cards or sub prime cards.  Just let the NFCU card graduate.  After a year you can then apply for a secured discover and you will be able to get cap one.  Just garden with those cards and let time pass.   

[mrspock08]

No joy on the recon with NFCU, but they approved my secured card with no problems today. I asked if they'd do it off the same HP as they made for my unsecured app, but didn't get a firm answer -- I'll see. 

On the surprising front, I think Associated may approve me for an unsecured card, which I totally didn't expect. I went in to ask about doing a share secured loan with them since that's where I have the bulk of my savings at anyways, and when she saw where my score was she suggested I apply for their visa as well, that she thought I had a good chance of being approved. I figured there wasn't any downside so long as it was on the same pull, which it was, and this afternoon got a call from their loan officer asking for copies of my pay stubs, so it sounds like they're leaning towards approving me. At least I assume they are -- I can't imagine they'd want proof of my income just to deny me. 

Georgia's Own CU apparently isn't ask BK friendly as they appear at first, btw. That 'rebuilding' card is a 150% secured card. For a $500 CL, they want $750 deposited. Their share secured loans are for a max of 75% of funds on deposit (want a $500 loan? have $625 frozen).  I'm happy to lock up funds for a while to build credit, but tying up 50% over my CL for a secured card? That's a bit much to stomach.  Even Associated CU's secured card is just a standard 100% secured, and their share secured loans are for 95% of funds on deposit. 

Either way, I'm in the garden now. I hadn't really planned on applying more than once, but getting in at NFCU was worthwhile, even secured, and if I can get an unsecured with Associated CU then I won't turn it down (and I'll have a heart attack - though I guess the no current debt and solid income helps a lot).  Now the plan is to just bide my time for the next year or two, pay down to the share secured loan, and wait for the NFCU secured to graduate. 

Thanks guyatthebeach!

[Guyatthebeach]

Congratsulations on the secured NFCU Visa.  Just follow the plan and use it wisely, that card will be unsecured in 12 to 18 months. If you're like me, you will take advabtage of their rates. I love getting 3% on my CD.

Hopefully ACU will aprove your application. If they do, you will be in a great position on your rebuild. If you only get an offer for a sexured, take it and just work from there.

Please let us know what ACU decides about your app.

Guyatthebeach

[mrspock08]

Guyatthebeach (and everyone else)

Quick update: 

Just heard back from Associated CU. They approved the unsecured Visa. $500CL, 12% interest. (pardon me while my brain recovers). Just needed to run in and sign the application, the banker forgot to have me do that on Friday. I also opened up the share-secured loan with them ($500) today to get an installment reporting. 

Also, I pulled a CR and it looks like NFCU went ahead and approved me for the secured card off the same pull they used to deny the unsecured, so even saved an HP there.

I'm in the garden for at least the next 12+ months. Don't see any reason to even look at anything else until I've built enough history to consider a Discover or ideally a decent rewards Visa/MC (with all my work travel lately, Delta's various AmEx cards look awfully appealing as long-term targets), since I'm sure Barclay's are out for a lot longer than a year since I burned them..

Thanks for the advice and suggestions, everyone!