Next steps to take in rebuilding credit.

[xReMaKe]

Hello MyFico! I recently had to go through bankruptcy (chapter 7) and am trying to rebuild from it.

Before bankruptcy, all my scores were mid to high-700, and never had a late payment, unfortunately a few life situations happened, and I had to file.

I got my discharge in December, waited about a month and applied to a few credit cards and got accepted to 2.

PayPal 500 credit limit.

Credit one 500 credit limit.

Score went to TU 590 - EQ 603 – Experian 622, However made a decent sized purchase and since my combined credit limit is not high, it was about 45% of my total credit which dropped my scores to TU - 586 – EQ – 593 – Ex – 612 (as of march 21). Missed the cut off date, which is why it reported the full amount. Plan was to pay more than half before cutting off and pay the rest right after. Just paid it all off so that should increase scores back a decent amount.

My goal is to get all scores to about 670-700 from here to next December. Basically, an increase of 70-100 points. Anywhere in that range and I think that would be an amazing year coming off Bk.

Is this feasible?

What would you recommend my next steps be? I would love to increase my total credit limit. I don’t think I qualify for any other cards for now, and I should be able to ask for a credit limit from PayPal April 26 and credit one April 29 (though I plan on cancelling this card next January to avoid paying the annual fee).

Should I wait till I reach a certain score before applying and trying to increase my total credit limit?

Negative marks on my account apart from Bk is late payment on student loans which was during the bankruptcy.

Inquiries are as follows, TU – 5 – EQ – 3 – Ex – 2

[FireMedic1]

Who got burned?

[xReMaKe]

Unfortunately, I burned a few good companies. Don't know if the cards themselves matter so I'll list them as well. 

Chase Freedom/Slate.

Discover.

Amex Blue.

Capital One Quick Silver.

DCU.

[MasonK]

You burned some key players in the credit world, and from what I've read on the boards those players have long memories. I've seen people get lucky, but they seem to be exceptions.

I would not recommend going after more credit- new cards or actively seeking out CLIs. That's my answer to your question. Let time and good behavior boost your scores and limits.

[xReMaKe]

Yeah, American express will haunt me for a long time. Not even thinking of applying till it’s completely off my report.

Perfect, so lay low for a bit. How long would you go before trying increase credit limit or add another card? After you reach a certain score? And when that time comes up what companies would you try to go for?

What I’m thinking right now is, keep leaving 10% of credit reporting each month until about June.

That would give these accounts 6 months of positive behavior, and then depending on where my scores are go for a card (which since I burned quite a few good ones, don’t know which company to go for – PayPal Mastercard is the one that catches my eye the most) if scores not where I want them to be, repeat. Another 3-6 months and then see where I’m at.

[MasonK]

I understand the desire to rebuild, but I'll be honest in that your eagerness to amass a ton of credit cards and higher limits immediately after getting BK discharge feels a little premature.

Before I get to my commentary, I'll answer your question- don't focus on your CreditOne card since you plan to divest yourself of it. Use your PayPal card and let your good behavior speak for itself to the bank. If you need to pay for something bigger than your credit line, suck it up and use your check card until you have that level of available credit. If you're going to try for CLI, do it on 6 months intervals.

Now for the commentary- What got you into trouble in the first place? I don't know your specific situation, but at the highest level, you ran up a ton of debt you couldn't pay and filed bankruptcy. What lessons did you learn and what changes are you making to not go down that same road? I see posts on these forums of people that went through BK, spent 4-6 years amassing a ton of cards and limits, and then ask advice on what to do now that they've run up another $30,000+ tab with the banks. I don't want to see that happen to you.

[FireMedic1]

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@MasonK wrote:

You burned some key players in the credit world, and from what I've read on the boards those players have long memories. I've seen people get lucky, but they seem to be exceptions.

I would not recommend going after more credit- new cards or actively seeking out CLIs. That's my answer to your question. Let time and good behavior boost your scores and limits.

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Theres nothing wrong with asking for CLI's. If they are SP's thats fine.

[FireMedic1]

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@xReMaKe wrote:

Unfortunately, I burned a few good companies. Don't know if the cards themselves matter so I'll list them as well. 

Chase Freedom/Slate.

Discover.

Amex Blue.

Capital One Quick Silver.

DCU.

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Hit up Cap1 in 6 months and Disco in a year. If anything pops on their pre-qual page. Grab it. They are both forgiving. The others say later till BK falls off.

[MasonK]

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@FireMedic1 wrote:

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Theres nothing wrong with asking for CLI's. If they are SP's thats fine.

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I should qualify my comment that my concern is the potential for digging another hole that OP is trying to crawl out of. But yes, I agree with FireMedic1 about SP CLIs being OK as far as not damaging a score.

[xReMaKe]

How is it premature? When would you suggest the best time to start rebuilding would be? Isn’t it best to start as soon as possible? Also, I don’t know how you can interpret me wanting “a ton of credit cards” out of what I wrote when in my last message I specifically stated 1 card in the next 3-12 months.

Though yes, I would love to increase my credit limit, since credit utilization plays a big factor in credit scoring, if one could get a bigger credit limit, without any penalties I don’t see where the issue lies.  

My bankruptcy is complicated, and a bit deep. There’s a medical history, and a lot of things I don’t want to talk about, but I will say that I ended up having heart surgery, and don’t agree with certain systems that are in place. Where I made the mistake was not paying certain cards off and closing them, as well as completely neglecting my student loans during the process. Bk was a decision that was based on a lot of different factors, and it was a conversation to see what would benefit my household the best.

I’m definitely eager to rebuild my credit, but not to have a bunch of cards. I have a couple huge investment happening in two years due to some close ties. These investments require I build my credit back up.