Suggestions for credit improvement in 2013

[jetsfan2013]

Merry Christmas Everyone,

As I start planning financially for 2013, I took some time to look back at where I was a year ago. At the time, I was one month out of BK, no credit reporting, and my TU FICO was 565. Since then...

2012 Rebuilding:

Credit Scores: FICOs: TU ??? |  CreditKarma FAKOs: Transrisk 604, Vantage 627

My Wallet - The Rebuilders : SHOW MC (550) 4/12  | Cap One  (500) 1/12  | Cap One (500) 8/12  | First National (350) 6/12  | Auto Loan - Cap One 16000 @ 12.65 3/12

-  Overall UTIL Reported December 2012 - 65%, will be down to 40% in Jan 2013 and 0% Feb 2013

- Average age of accounts: 7 Mos (Oldest Active TL Cap 1 Jan 2012)

- Annual income: $75K.

- Baddies: Discharged BK (11/2011) Dismissed BK (2/2011), Tax Lien 2/2009

- 19 hard inquiries on EQ CRA report.

- Perfect payment history for 1 year.

2013 Goal: Barclays Rewards or PC by Cap One to Cash Rewards (basically want to use only 1 CC that gives rewards/points for everyday purchases)

2013 Goal Part 2: Possible Refi of Auto Loan, however local CU shot down refi due to open tax lien in October 12.

2014 Goal: Mortgage

Any suggestions, feedback would be great!

[chasmith]

Your credit lines are small but you have more than enough separate cards.  Your auto loan gives you an installment loan, so you have the best credit mix you can without a mortgage.

You don't say whether the tax lien is paid.  If it isn't you need to pay it, if it is see if there's any way to get it removed.  Even if it's paid, the tax lien may be a bigger problem than the BK when lenders review your report manually, because you could get one again.  You can't file BK any time soon.

Follow through on getting your util down.  utilization under 10% is said to be better than zero.  I would rotate so you show a small balance on each card at least every three months to be sure they don't get closed for inactivity, and report regularly.

The FACO scores mean nothing, and at least where I live EQ is pulled the most.  You might want to consider EQ scorewatch (the FICO version), which I get through NFCU at a discount.  Or, pay to pull at least one after you get the utilization down.

The AAOA seems low, did you have no accounts before filing BK?

Stop applying at least until after June when you'll have only one INQ based on the accounts you list, since you say you have 19 HPs that means you had turndowns as well.  Get the INQs below 5 before trying any more apps..  Barclays is very sensitive to Inquiries.  CapOne PC isn't likely but you may get soft CLIs.  Don't make any apps for six months to a year before applying for the mortgage.  Apps won't knock you out for the mortgage by themselves but you'll have to explain.

You say you want to get a mortgage in 2014.  Did you have a home foreclosed, or otherwise transferred in BK?  If so the wait is 3 years from when the deed is taken out of your name.  I didn't own real estate when I filed and closed my new home 29 months after discharge.  You might want to look in to NACA, they aren't score driven and offer a great mortgage program - if you have the patience to stick with them.

Try the Gardening Club in these forums for support on not apping.

[jetsfan2013]

Thanks chasmith for the feedback. 

I wanted to answer a few of the ques you posted

1. tax lien - survived the BK on an installment plan with them now, about 18 months away from being paid off

2. Since my credit limits are so low, I can pay my util to 0-10 percent when I get paid. I dont use the first national cc at all , just have it up reporting. I think I have my gym membership being paid recurring so 15 bucks a month is all that card sees. I plan on using 1 of the Cap 1s(the first one I opened) since it was a credit steps card that began at 300 and now is at 500. My 2nd Cap One started at 500 and will go up to 750 sometime in the Spring, so I am trying to limit the use on that one and pay the small balance down or off.

I had a student loan that had been opened for 14 years prior to US Dept of ED selling the loan. Maybe I am reading the AAoA wrong, got that off of Credit Karma.

As for EQ score watch, is that through here or equifax.com?

2014 would be the 3 yr mark from the property I used to have being out of my name, that was the reason for my target date. Will reseach NACA and stay in the garden until June at least.

[electra]

Hi Jetsfan,

If the tax lien is an IRS lien and you are in a payment plan, you may be able to get the lien withdrawn.   Go here to see the qualifications required:  http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Fresh-Start-Notice-of-Federal-Tax-Lie...

[jetsfan2013]

Thanks electra for the link. I looked into the removal when I first started the repayment plan but was shot down. Some have said having a local tax rep attempt to get it removed helps.

That is also on my to do list for 2013.

[SisterGirl]

Merry Christmas to you !

I loved reading your  post & wish you ALL the best ! It seems you are right on target with a solid plan, & I look forward to enjoying....and congratulating....your successes ! You can do it whatever your heart desires....it's just a matter of time. I remember when I came back from a divorce & my credit took a hit, but rest assured....I came back BETTER than I was before. 2013 will be a big year for me in many ways & I can hardly wait to pull the trigger on the AMEX BCE, as I'm eluding it until 11/2013 "on purpose". 

SisterGirl

[MovingForward_2012]

That tax lien may be a problem for getting a mortgage. Did you plan on having that removed before you apply? 18 months is June 2014. My mortgage broker told me the tax lien has to be paid to qualify as the bank doesn't want the IRS sticking anything on the property. Somehow the IRS had mercy on me 7 years ago and didn't file a lien, my tax debt was just over the threshold ($10,000) for requiring a lien to be filed. I have only $1500 left to pay on it now.

[sjt]

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@jetsfan2013 wrote:

Merry Christmas Everyone,

As I start planning financially for 2013, I took some time to look back at where I was a year ago. At the time, I was one month out of BK, no credit reporting, and my TU FICO was 565. Since then...

2012 Rebuilding:

Credit Scores: FICOs: TU ??? |  CreditKarma FAKOs: Transrisk 604, Vantage 627

@Anonymous Wallet - The Rebuilders : SHOW MC (550) 4/12  | Cap One  (500) 1/12  | Cap One (500) 8/12  | First National (350) 6/12  | Auto Loan - Cap One 16000 @ 12.65 3/12

-  Overall UTIL Reported December 2012 - 65%, will be down to 40% in Jan 2013 and 0% Feb 2013

- Average age of accounts: 7 Mos (Oldest Active TL Cap 1 Jan 2012)

- Annual income: $75K.

- Baddies: Discharged BK (11/2011) Dismissed BK (2/2011), Tax Lien 2/2009

- 19 hard inquiries on EQ CRA report.

- Perfect payment history for 1 year.

2013 Goal: Barclays Rewards or PC by Cap One to Cash Rewards (basically want to use only 1 CC that gives rewards/points for everyday purchases)

2013 Goal Part 2: Possible Refi of Auto Loan, however local CU shot down refi due to open tax lien in October 12.

2014 Goal: Mortgage

Any suggestions, feedback would be great!

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The best thing for you to do and get a score boost is to get your utility ratio down. I would also hold off on apply for other accounts as well.

[jetsfan2013]

Just paid down 1 of my CC and had 1 of my inq fall off. Credit Karma says the inq stay on the your credit report 2 years. I thought I ready they only impact your score for 1 year?

[Shogun]

Yes, that's correct.  Inquiries stay on your report for 2 years, however they only affect scoring for 1 year.