Rebuilding from Chapter 7

[Anonymous]

Good morning,

Long story short my business went south and was forced to file for chapter 7 and just completed the process, so Im in a bad spot. Im immediately trying to jump on building credit as fast as possible advised by my lawyer who said you want to make a large amount of good credit reports on your score ASAP to atleast in assist in the fact theres a red flag on me now. He mentioned my most recent activity is really what creditors look at, and to do what I can to make it look good. Ive started by doing the following:

Continued to make car payment(s) on time (car loan was reaffirmed when filed) with Lexus

Authorized user on family members credit cards with long outstanding credit history at same billing address Qty 2-Citibank/Mastercards and 1 Discover card with 5 year life span

Federal student loans continued to be paid on time (govt loans cant be touched by chapter 7 not 100% sure if federal loans are reported or benefit from)

Am I off to a good start? Should I do more or sit on this?

Also as I mentioned some of this in a previous post, Im debating on being an authorized user on a HSBC/best buy card to finance a purchase and help my credit. No one's 100% sure if HSBC reports AUs, not even HSBC as Ive called had 2 answers and had my family member call in regards to her account and the rep flat out said, "you know Im not really sure".

[DanielF]

I'd start by signing up to myfico so u at least have ur equifax report and score to start with. U should try preapprovals with orchard and cap 1. If u can't get unsecured u should get secured card until your score starts improving and u get some time between the discharge.

[Anonymous]

At this time I highly doubt anyone would do a pre-approved unsecure. Since my credit card debt is now $0 I get tons of pre approved offers with high interest rates and annual fees. I do have a savings account with Harris. Should I inquire about a secure? I just dont want to go overboard, assuming that is possible.

[Anonymous]

I was also in the same situation.  I have been approved for capital one card and hsbc card.  If you go to cap one website they will do a pre approval and it doesn't take a hit on your credit good luck

[Anonymous]

---

@Anonymous wrote:

 Im debating on being an authorized user on a HSBC/best buy card to finance a purchase and help my credit. No one's 100% sure if HSBC reports AUs, not even HSBC as Ive called had 2 answers and had my family member call in regards to her account and the rep flat out said, "you know Im not really sure".

---

There is no reason to make a large purchase when you are rebuilding from bankruptcy to "rebuild your credit".  Hard enough explaining to a potential creditor why you filed bankruptcy while maintaining a Lexus, let alone immediately building up new balances.

I'll also give a +1 to using the cap 1 and orchard bank pre-approval sites.  You said something to the effect of "I doubt anyone would pre-approve me"... Why would you spend the time writing that here when in the same amount of time you could have checked the pre-approval site and found out for sure?  People here will offer you some of the best FREE advice you can find anywhere in the world... You should probably take it to heart if you are serious about rebuilding!  We (collectively) have faced just about every credit challenge under the sun... There is no specific formula that works for everyone, but collective experience and recommendations will be your best bet.

Merrick Bank (if they still exist?), Household Bank, and local credit unions are also useful and effective ways to rebuild shortly after a BK.

Good luck!  And don't get yourself into more debt, yet!

[Anonymous]

I think its great info, I apologize if that came off as if I felt it was useless information. I have a mindset of "get used to hearing no" after the mess I made. Being more than financially stable and doing something you love running a business -to creditors asking where payment is on your business credit card and dealing with bankruptcy lawyers due to the recession is a painful process and gets you down. I will give a the Cap 1 a shot thanks all that contributed. To elaborate on the HSBC/Best Buy im trying to finance ~$400 to meet the minimum 18 months no interest financing and spread the payments out over time. I have the funds now and a stable job but Id rather take a route that can build my credit if possible. Thats why I was asking if anyone can confirm if authorized users on a HSBC/Best buy are reported because HSBC cant even give me a clear answer. I obviously cant get approved for a HSBC Best buy card as it is all automated and will flag the chapter 7. That gave me the idea to be an AU on a family members long existing BB card but I dont want to waste their time adding me if it wont report.

[aussiesareforever]

Not sure about the AU reporting but I was able to get an unsecured Cap1 card three months after my BK discharge. It came with a $300 limit and a $19 annual fee. My CL was increased to $500 after three billing statements and I'm currently sitting at $2500. I know that Cap1 gets a lot of hate on these boards but it has been a lifesaver in rebuilding my credit and I will recommend giving them a shot!

[Anonymous]

Daisy,

Just out of curiousity, not sure how long youve had the card now, was the annual fee ever dropped? I know its only $19 but just wondering.

[Anonymous]

Not everyone gets the annual fee, on either HSBC orchard or cap1. Ymmv, so definitely worth checking out. My $300 unsecured cap1, and 3 HSBC cards never had an AF and grew with me until I was eligible for non-rebuilder cards. I highly recommend them!

[StartingOver10]

---

@Anonymous wrote:

Good morning,

Long story short my business went south and was forced to file for chapter 7 and just completed the process, so Im in a bad spot. Im immediately trying to jump on building credit as fast as possible advised by my lawyer who said you want to make a large amount of good credit reports on your score ASAP to atleast in assist in the fact theres a red flag on me now. He mentioned my most recent activity is really what creditors look at, and to do what I can to make it look good. Ive started by doing the following:

Continued to make car payment(s) on time (car loan was reaffirmed when filed) with Lexus

Authorized user on family members credit cards with long outstanding credit history at same billing address Qty 2-Citibank/Mastercards and 1 Discover card with 5 year life span

Federal student loans continued to be paid on time (govt loans cant be touched by chapter 7 not 100% sure if federal loans are reported or benefit from)

Am I off to a good start? Should I do more or sit on this?

Also as I mentioned some of this in a previous post, Im debating on being an authorized user on a HSBC/best buy card to finance a purchase and help my credit. No one's 100% sure if HSBC reports AUs, not even HSBC as Ive called had 2 answers and had my family member call in regards to her account and the rep flat out said, "you know Im not really sure".

---

Have you checked your report yet to see if the Lexus tradeline is reporting since your discharge? They are not obligated to report, even if you reaffirm. Some of the auto lenders will and others won't, but you have to check to see. I was in your position Jan '09 and its possible to rebuild, but it does take time.

I have the Best Buy rebuilder card and got it in June 2010. It was easy to get, but a low limit of $500. I had a recent CLI to $800. I don't think it is a very good card for getting decent credit limits and I plan to close it after I am able to get something prime. YMMV.