A Question??

[Wonderyears]

I hadn't had a credit card in 8 years, began paying cash for everything including cars, but I was renting. Unlike you, I needed a home of my own. Mostly a result of my delinquent credit falling off my reports, my scores were mid-high sixes (were in mid 5's). As soon as I opened 3 revolving tradelines, my scores increased to mid-upper 700's within 3 responsible months of usage. I only use them for credit optimization, nothing more. Now I'm waiting on a home to be built.

[Anonymous]

Your post couldn't be further from the truth. While you CAN get approved under those terms, most people do not attain it and the government is cracking down on banks that advertise mortgage loans to those 3 years from a foreclosure just because FHA rules state that they can obtain a new mortgage.

I filed BK twice and had a foreclosure and my life has been nothing but a nightmare for 10 years. I didn't hit 640 until late 2011. Finally closed on our home this month.

After bankruptcy, you need to be a model citizen. Any late payments or collections look very bad to lenders...worse than for someone without a BK.

You are right, how do you get to a 640 with all of that? Most people don't, plain and simple. It is a great example of a dangling carrot. Folks that filed BK or had a foreclosure have not been living the good life. They paid their dues. You can try BK if you like but you will regret it.

Late pays and collections can be a sign of trouble to lenders. They want to see the problem corrected before they lend you more money. It is as simple as that.

[Anonymous]

More thoughts:

You have to get credit to make credit. No credit equals low credit score. Something needs to be open and active at all times to rebuild and maintain a good credit score. Late pays are the worst thing you could do to your credit besides BK or foreclosure. Even if it is just the $25 min monthly payment, pay that rather than be late on a credit card. Many people do not realize this and assume it is no big deal. It is a big deal for the next 12-24 months at the least.

Post BK I have never been late on anything...100% on time payments. I even had a auto loan that had no grace period. You had 24 hours to pay it and if you were late by 1 HOUR, it went on your credit report. Did I chance sending my payment through regular mail? Hell no! That auto loan was put on autopay and always cleared on the 15th for 4 years until I traded it in. Even though I am in with Acura Financial now and they have a grace period, I have my car lease setup on autopay. All my credit cards are paid days before the due date...never on the due date unless it is setup on autopay days in advance.

After a BK or foreclosure, credit isn't just extended to you because you hit some sort of magical anniversary. This is a big misconception. You have to build your credit back up which takes years not months.

I started with a subprime auto loan and an unsecured Orchard Bank card with a $300 limit back in 2009. I wasn't approved for another card until 2012. I now have $7100 in credit limit but it didn't happen overnight. I waited 5 years and paid cash only during that time after getting denied so many times. I couldn't obtain the apartment I wanted because they had no BK policies so I ended up living under crummy private landlords and one of them assaulted me for failing to pick up a few weeds in the backyard. I barely got approved for a Chase Freedom last month with a score in the low 700's because of the 9.5 year old BK 7.

People who have never filed BK think it is easy...just wipe the debt away and start over. No way! That couldn't be further from the truth. I would take a few late pays any day and flip it to an 800!