Does Good Credit Before Bankruptcy Make Rebuilding Credit Easier?

[sunflwrgrl13]

Oh yes, we are using the Macy's card. We had to use it last year to pay for some moving expenses, so we are carrying a balance of around $2200 on it. The balance/available credit percentage is probably too high though - we are using about 50% of the avail. credit. But we are making huge payments on it now that I'm employed, and we'll likely have it paid off in the next 3-4months.

I just hate applying for another one, and having yet another inquiry on our credit. We've had 4 in the last 6mo due to car loan applications and the turned down cc apps.

I will say, though, that when we were applying for a car loan back in Dec., our scores were around the 640/650 range, and they are now back around 720. So making the car payments the last 5 months must have been what raised it up.

[Logan]

well, we were ones that didn't listen to our atty and paid our charge bills until we filed. by then it was too late for the companies to report us late we were in the high 680's after our bk....now we are both in the 700's like 720 and 712. before we filed we were in the 800's. we just didn't give any time for reporting so it worked out well for us.

also, please note, we are the exception and NOT the rule about continuing to pay on our cards, there was a reason and it was choice. actually, it worked out well for our credit scores in general.

Same with me. I continued to pay till the end against everyone advice and my credit bounced back quickly.

[msm859]

Same with me. I continued to pay till the end against everyone advice and my credit bounced back quickly.

Of course everyone is asking the wrong question. This WHOLE bankruptcy process should be a business decision. Likewise the "costs" of keeping your FICO score high should be a business decision based on costs vs benefit analysis. Thus, how much were ALL of those payments you made? And by doing so how much better of an interest rate did you get and thus save for the Loans that you took out after your BK was done? Do NOT buy into the emotional part of a FICO Score. If you are not going to be using "credit" for 2 years post bankruptcy, absent nominal payments, I would suspect it does not make business sense to make any additional payments once you have made a decision to file.

[ksgirl38]

Oh yes, we are using the Macy's card. We had to use it last year to pay for some moving expenses, so we are carrying a balance of around $2200 on it. The balance/available credit percentage is probably too high though - we are using about 50% of the avail. credit. But we are making huge payments on it now that I'm employed, and we'll likely have it paid off in the next 3-4months.

I just hate applying for another one, and having yet another inquiry on our credit. We've had 4 in the last 6mo due to car loan applications and the turned down cc apps.

I will say, though, that when we were applying for a car loan back in Dec., our scores were around the 640/650 range, and they are now back around 720. So making the car payments the last 5 months must have been what raised it up.

Hi! My understanding of the credit score drop from the inquiries, at least from one of the attorneys I talked to, was that you take the initial hit, but a couple months later it rises back up so I'm not sure I'd worry about the hit from the inquiry too much.

That's good news about the car payment history though. It gives me hope.

[mijd]

Of course everyone is asking the wrong question. This WHOLE bankruptcy process should be a business decision. Likewise the "costs" of keeping your FICO score high should be a business decision based on costs vs benefit analysis. Thus, how much were ALL of those payments you made? And by doing so how much better of an interest rate did you get and thus save for the Loans that you took out after your BK was done? Do NOT buy into the emotional part of a FICO Score. If you are not going to be using "credit" for 2 years post bankruptcy, absent nominal payments, I would suspect it does not make business sense to make any additional payments once you have made a decision to file.

For me it was more in tune with my upbringing and the old fashioned idea of the shame that USED to go with bankruptcy. My parents had a financial meltdown to the point of charge offs etc when we were kids but they NEVER considered bankruptcy. I made all payments until the end with the exception of my mortgage which I purposely stopped paying to enter into the remodification program and then with my attorney's advice a short sale. When the dust cleared my HELOC was going after me for 119K so bankruptcy was the only solution.
I was able to obtain a unsecured CC to help rebuild my score. My score is fair right now because of my BK and my nephew's student loan that I co-signed on. Everything is current but credit utilization is high. My FICO was in the low 800 months before I filed.
Everyone should remember when the new Federal CC laws went into effect... everyone's credit limits were being lower and their interest rates when going up even with a good FICO score.

[Logan]

Of course everyone is asking the wrong question. This WHOLE bankruptcy process should be a business decision. Likewise the "costs" of keeping your FICO score high should be a business decision based on costs vs benefit analysis. Thus, how much were ALL of those payments you made? And by doing so how much better of an interest rate did you get and thus save for the Loans that you took out after your BK was done? Do NOT buy into the emotional part of a FICO Score. If you are not going to be using "credit" for 2 years post bankruptcy, absent nominal payments, I would suspect it does not make business sense to make any additional payments once you have made a decision to file.

msm859, I agree with you and in my case money was not the problem, debt was the problem. Once I was debt free thanks to my BK I was in pretty good shape so continuing to make payments on the credit cards for a couple of months wasn't a big deal.
I cannot remember what my payments were on my cards but whatever they were it was worth having my credit score bounce back quickly and within a year I already had reapplied and attained all the credit I would ever need. In fact, 4 years later I still have 3 of my credit cards that I received during my 1st year out of BK and they have decent credit limits and no annual fees.
Logan