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How are you supposed to rebuild your credit post bankruptcy?

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Established Member

How are you supposed to rebuild your credit post bankruptcy?

I'm a little unclear how many credit cards are too many?  I'm doing good and paying everything on time and completely every month.  I'm just trying to understand how I should used my credit cards and if 4 of them is too many?  I also have a mortage and an auto loan.  Does paying them off quicker increase your score at all?  I have been paying them off quicker but didn't know if it was more beneficial to pay off the car or home quicker?  The home might be paid off in 10 years and the car is a 6 year loan with 5 years on it.

Message 1 of 11
10 REPLIES 10
Frequent Contributor

Re: How are you supposed to rebuild your credit post bankruptcy?

I don't think 4 cards is too many.

As far as paying off earlier, probably the house since it's a bigger balance. 

Message 2 of 11
Valued Contributor

Re: How are you supposed to rebuild your credit post bankruptcy?

Save money for emergencies and pay highest interest rates first.

 

Less than 10 cards is not too many as long as you can stay on top of them.

 

Now, too many inquiries and too many newly opened accounts is a different stories.

Rebuild started in 2014  -  $100k+ unsecured credit in 2017  -  $250k+ unsecured credit in 2019.

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Message 3 of 11
Contributor

Re: How are you supposed to rebuild your credit post bankruptcy?


@truckinusa wrote:

I'm a little unclear how many credit cards are too many?  I'm doing good and paying everything on time and completely every month.  I'm just trying to understand how I should used my credit cards and if 4 of them is too many?  I also have a mortage and an auto loan.  Does paying them off quicker increase your score at all?  I have been paying them off quicker but didn't know if it was more beneficial to pay off the car or home quicker?  The home might be paid off in 10 years and the car is a 6 year loan with 5 years on it.


I picked up 9 cc after my discharge, I think 4 is fine. I have had no issues building with a total of 12 new accounts post dc. I just need to let this age now for at least a year.




Started from the bottom now I'm here. Smiley Happy
Message 4 of 11
Established Contributor

Re: How are you supposed to rebuild your credit post bankruptcy?

1. Don’t rack up new debt

2. Save Save Save for an emergency. 8 months of salary or expenses.

3. Pay off car.

4. Then if you want to pay more on mortgage.

 

Those basic steps, especially 1 and 2 will keep you from ever getting back in the same situation again.

I just returned from financial hell. Don't go, the brochure is a lie.
Message 5 of 11
Frequent Contributor

Re: How are you supposed to rebuild your credit post bankruptcy?

Four is not too many cc's.It's how you manage your credit accounts that's most important.On all your credit accounts keep paying on time monthly.As the derogatory accounts age and do not acquire any more derogatory information your Fico score will improve.Keep balances on all cc's below 6% and for more credit score points learn the azeo method before any apps.Try to keep your oldest cc open.As long as you have one open installment loan you will be fine.If you pay off for example the auto loan you will have one less installment loan balance you will receive about less then ten credit score points.Small potatoes.That's an estimate.And only open credit accounts that you absolutely need.KEEP UP THE GOOD WORK,

Message 6 of 11
Established Member

Re: How are you supposed to rebuild your credit post bankruptcy?


@Morpho wrote:

1. Don’t rack up new debt

2. Save Save Save for an emergency. 8 months of salary or expenses.

3. Pay off car.

4. Then if you want to pay more on mortgage.

 

Those basic steps, especially 1 and 2 will keep you from ever getting back in the same situation again.


Car first huh?  I was a bit on the fence since the house and the car are both low interest.  House is 5% and the car is 3.8% which makes no sense really, but it is just the way it is.  

Message 7 of 11
Senior Contributor

Re: How are you supposed to rebuild your credit post bankruptcy?

It only takes 3 cards and a loan to achieve the FICO bonus I call it. You can pay off the car and still have the installment part from your mortgage for the credit mix FICO likes. The extra cards help show responsibility to the bigger lenders you can handle credit. I settled with 7 accounts open and a total of 9 cards (2 closed by me) in 2 and a half yrs.  Your fine.





My posts are JMHO. I DO NOT claim to be a FICO expert. Just sharing my experiences from rebuild to recovery after BK DC. My siggy is not to brag at all. Just to show fellow members what can be accomplished when you do it right and play the FICO Credit Game.
Message 8 of 11
Senior Contributor

Re: How are you supposed to rebuild your credit post bankruptcy?


@Fx6cowboy wrote:

@truckinusa wrote:

I'm a little unclear how many credit cards are too many?  I'm doing good and paying everything on time and completely every month.  I'm just trying to understand how I should used my credit cards and if 4 of them is too many?  I also have a mortage and an auto loan.  Does paying them off quicker increase your score at all?  I have been paying them off quicker but didn't know if it was more beneficial to pay off the car or home quicker?  The home might be paid off in 10 years and the car is a 6 year loan with 5 years on it.


I picked up 9 cc after my discharge, I think 4 is fine. I have had no issues building with a total of 12 new accounts post dc. I just need to let this age now for at least a year.


On a side note. Hope your gardening and get your util down. I read your siggy. Its grow time.





My posts are JMHO. I DO NOT claim to be a FICO expert. Just sharing my experiences from rebuild to recovery after BK DC. My siggy is not to brag at all. Just to show fellow members what can be accomplished when you do it right and play the FICO Credit Game.
Message 9 of 11
Established Member

Re: How are you supposed to rebuild your credit post bankruptcy?


@FireMedic1 wrote:

@Fx6cowboy wrote:

@truckinusa wrote:

I'm a little unclear how many credit cards are too many?  I'm doing good and paying everything on time and completely every month.  I'm just trying to understand how I should used my credit cards and if 4 of them is too many?  I also have a mortage and an auto loan.  Does paying them off quicker increase your score at all?  I have been paying them off quicker but didn't know if it was more beneficial to pay off the car or home quicker?  The home might be paid off in 10 years and the car is a 6 year loan with 5 years on it.


I picked up 9 cc after my discharge, I think 4 is fine. I have had no issues building with a total of 12 new accounts post dc. I just need to let this age now for at least a year.


On a side note. Hope your gardening and get your util down. I read your siggy. Its grow time.


Gardening?  I just charge a little bit on the 4 cards every month if that is what you mean.  I honestly could use another income stream.  If my wife wasn't in school I would probably make a lot more than $50,000 a year.

 

Message 10 of 11
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