Update on BK7 Recovery 6 months post-discharge - FICO8 679/650/667, NFCU $500 SecCL -> $2k unsec

[mrspock08]

Hi all, 

I posted a couple of questions about getting my BK7 rebuild started just about 6 months ago, In late November my NFCU secured card auto-converted to an unsecured nRewards card with a $2k CL without a HP. shortly after I received my discharge. For those who may want to read the topic, it's here at http://ficoforums.myfico.com/t5/Bankruptcy/Starting-my-post-BK7-rebuild-and-need-some-advice-did-I-j.... Thanks to everyone who weighed in with questions, thoughts, and suggestions at the time!

I wanted to post a quick update with where I stand at the moment. A couple of facts to be aware of going in:

I've had a job change in the interim -- while I had been on disability I'd gone back to work very part time shortly before filing my BK7 in Feb 17. That very PT job has now turned in to a well-paying executive-level job, which I officially started on Jan 2, 2018, which comes with a pay increase of nearly 20k/yr.

I moved, locally, in October, 4 mos post-discharge. The house I'd been in went on the market, so no choice. The realtor who managed the rental transaction ran my credit, but apparently ran the credit report pull as a mortgage report, because that's the disclosures I got in the mail, and how it's reflecting on my CR's -- Credco, with a hard mortgage inq code. Not sure if this is tanking my scores, but if it is, I'm pretty ticked about it. I don't quite see how a rental application should be a hard inq to begin with, but a mortgage inq really doesn't fit.

Now, those facts aside, here's where I started out pre-bk, where I was on June 6, 2017 at my discharge, and where I am now:

2/6/17 Pre-BK VantageScore3 - EQ 532 / TU 542

6/6/17 FICO8's:       EQ 620 / TU 565 / EX 561 

12/6/17 FICO8's:     EQ 696 / TU 649 / EX 676

12/31/17 FICO8's:   EQ 679 / TU 650 / EX 667

As for my cards, post-discharge I opened a NFCU Secured Visa, $500 CL,, along with a $500 Share Secured Loan, which is paid down to under $25 now. I also have an Associated Credit Union (GA) unsecured $500 CL Visa. Initially I had a $500 share secured loan at ACU as well, but screwed up my repayment cycle on it and accidentally paid it off early when setting up the autopay, so opted to setup a new one at NFCU for relationship building, and since they would do it without a HP. I'm also an AU on a relatives NFCU Signature Visa w/ a 13.2k CL -- in my case I didn't do it for score purposes, I needed access to a higher-CL card for car rental purposes when making multiple frequent trips for work. 

In late November my NFCU secured card quietly auto-converted to an unsecured nRewards card with a $2k CL without a HP.  I've been using both my NisrFCU and ACU cards quite heavily, but paying them down weekly, so neither ever closed above 7% and one was always zero'd, until I screwed up in December and mis-timed a payment which let my NFCU card post with a significant balance. My payment wasn't late -- just didn't post before the statement cut. Hopefully my FICO8's will rebound in Jan once my usage comes back down to where it should be (under 10% per card and total).

My goal is 700 or better in 2018 -- ideally I'd love to hit 720, but don't know that I see that as realistic within 12mos of discharge, even as high as my scores are at the moment. My current plan is to stay in the garden another 6mos or so, and then re-evaluate what my next steps should be. Longer-term I'm looking towards some of the travel rewards cards out there, given my travel-heavy job requirements now, however I recognize none of those are likely to be possibilities for at least another 2-4 years. 

Thanks to everyone for their help, encouragement, and suggestions.

[Anonymous]

Awesome job so far! Can you expand a bit on the NFCU SSL? Will they allow pre-payment and still keep the loan alive for the full term? What term did you get?

Asking because DH will need an installment option to replace a car loan that will close soon on his CR. Thanks!

[Anonymous]

Here's how Navy Federal's share-secured loan works:

• Application does not involve a credit check (generally everyone who has not caused an NFCU loss gets approved)
• Co-borrowers are not allowed on share-secured loans
• Loan is secured by cash in your regular savings account
• Smaller amounts require smaller terms (e.g. 6 mos.)
• Loan can be paid off or down at any time, without penalty
• As you make payments, the principal amount of the payment will be released from your savings account (e.g. make a $500 payment representing $495 principal and $5 interest, then the hold on your savings is reduced by $495).
• Paying down the loan will push due dates out (e.g. If you pay down 90% of your loan, you may only have 1-3 payments left). For example, if you have a $1200 loan that requires 12 x $100 monthly payments, and you make a $1,000 payment, your next payment will be due 11 months from now. 

What some people have done (including myself) is a large share-secured loan, followed by a large principal payment, and then use the funds that have been released as collateral on a secured credit card.

Note: I am a Navy Federal employee. My opinions are my own and do not represent Navy Federal Credit Union.