Post Bankruptcy Credit Repair

Anonymous · ‎04-13-2007

Is it realistic to hope to get your Fico score back up to over 700 following a chapter 7 within 2 years of discharge? I know that regardless of circumstances all BK filers are lumped into a category by creditors as being just barely above pond scum level, which is unfortunate because not every BK is avoidable and not all BK filers are deadbeats, but is there some arbitrary time period or Fico point deduction that holds a BK filer back from rebuilding their credit score back up quickly? Essentially I want to know, how much does a BK (Specifically a Chapter 7) cost in terms of Fico points and is it even possible to offset that point deduction?

Anonymous · ‎04-13-2007

pinklawpuppy wrote:
Is it realistic to hope to get your Fico score back up to over 700 following a chapter 7 within 2 years of discharge? I know that regardless of circumstances all BK filers are lumped into a category by creditors as being just barely above pond scum level, which is unfortunate because not every BK is avoidable and not all BK filers are deadbeats, but is there some arbitrary time period or Fico point deduction that holds a BK filer back from rebuilding their credit score back up quickly? Essentially I want to know, how much does a BK (Specifically a Chapter 7) cost in terms of Fico points and is it even possible to offset that point deduction?

It depends on what your score was before the BK hit your reports. It can take up to 200 FICO points. I know people who came straight out of BK with scores in the 600s.

You are really getting it mixed up, filing BK doesn't kame you pond scum. I thought the same thing and that kept me from actively repairing my credit for YEARS after I filed. Leaving in pond scum land until I realized that the only way to rebuild credit is to get credit.

Depending on your score coming out, you may be able to open a card in three months. Not with BOFA or Amex whats called a rebuilding card, such as HSBC or Orchard bank. They report just like a regular card. As sson as you start getting better offers apply, keep your utilizatinon low and depending on how far you fall, you may well be in the 700s in 2 yeas. Wixhful thinking I know but if you're starting over at 6, 7 isn't too far to climd.

Anonymous · ‎04-13-2007

Brammy, I can tell you are quite savvy in this area, thanks for your post! Everything I have read on this subject is littered with "you get the rates you deserve" following a BK so thanks for the positive energy there, much appreciated. My score now is in the mid to high 6's but I feel like it's been there forever (I am nearing the 2 year mark following a BK) and don't know how to boost it, so I am feeling a little frustrated. I totally get what you are saying about keeping your utilization down, I actually came out well enough to get a card with a fair limit and then recently bumped up to a larger limit card to keep the debt to limit ratio low, that helped a lot but I am still longing for the over 700 mark and just wanted to know if I was crazy for thinking it was possible. You are an inspiration, thanks for that!

Anonymous · ‎04-19-2007

We went to a class on Post Bankruptcy and bought a book by the same title as the seminar.

"Credit after bankruptcy"

We did what we were told and had our score up just over 700 in 8 months

Good thing too because my landlady died and the kids needed to sell the house. We closed on the house 2 days after our bankruptcy had been discharged.

It is possible to bring the score up but you have to work at it.

Many people told us it was not possible to buy a house until you had been discharged for 2 years but a friend of mine that was a mortage broker/realator found us a lender .

All things are possible if you believe God.

mserogerb

Anonymous · ‎04-20-2007

Wow, what a good friend you had in a mortgage broker/realtor! Does he/she know anyone in Oregon?

The thing is, most BK filers can get a mortgage or credit very soon after a BK, but at subprime rates and most often, from predatory lenders. The truth is, BK filers are a pretty safe bunch, they are usually wanting to build thier credit fast following a BK so they'll pay higher the rates because they have fewer choices and creditors know that this group is safe because they can't discharge a debt for at least 7 years, so lending to us is a safe bet, despite what they may say. I know that if the BK is for medical reasons (Which ours was) you can most likely get into an FHA loan but for a conventional rate that is above subprime, the waiting period is at least 2 years. We are in a home, we didn't lose it in the BK (thank goodness!) but we need to refi and we want to get a decent rate. The thing with FHA loans is that you have to pay mortgatge insurance and I want to skip that in a conventional loan so I have to get my score up AND I have to wait out the 2 year mark (which is thankfully coming up here pretty soon), I just want to get the best possible rate I can get in a conventional following my BK and that means I have to have my FICO over 700. Thanks for your thoughts!!!

Anonymous · ‎05-01-2007

I'm about 3 years after a Chapter 7. I got one CC with Household bank right after filing. My scores shot up from 400's immediately after filing. Now they are in the 650 range. I tried to get a loan for some equipment for my job ($5000) and nobody would lend it to me, not even with my brother as a cosigner.

I just ran my credit and found that on Equifax and Experian I have an account with past due payments showing! I don't even know what account it was but I do know I haven't had a past due in over three years! I also had one bureau reporting my car incorrectly, not as IIB. I just disputed so hopefully that will help.

I don't plan on buying a home but in the next couple of years I might want to buy a new car. Hopefully I'll be able to get a decent interest rate. Hopefully??? I refuse to pay a jacked up rate on a loan.