Don't know what to do to get credit score up

[artgood]

So, two years after filing BK, I checked our credit score today and it is at 632. I absolutely have no idea what to do to get it back up. We really are in need of a new vehicle, and there is no way for us to afford one outright, but with a credit score that poor I don't see us getting a loan.

Any suggestions?

[frogger]

Tell us what you have done so far, and then suggestions will be forthcoming........

[artgood]

Tell us what you have done so far, and then suggestions will be forthcoming........

I have paid all of my bills on time, and I have one credit card with a $300 limit.

That's about it.

[frogger]

What we did:

Nothing for 1 year with the exception of making sure everything on the credit report was accurate.
After 1 year, applied/received Orchard Bank secured card, 400.00 credit limit.
After 2 years, applied/received car loan with local bank. They loaned us 80% of NADA value @ 10% interest. (Yes, it's too high, but there were other reasons for financing with them.) At this time, my score was 658, the wife was 679.
After 2 years, applied/received Capital One card, one for myself and one for the wife. Each has 2K credit limit.
After 2 years, wife applied/received Barclays card for Apple product with 6 months no interest. (Already paid off)

And as you state, each and every month, the bills are paid on time. I'm 6 months ahead on the car payment and 18 months ahead on a student loan that I'm paying for.

Haven't pulled credit again, and won't for another year.

In a nutshell, there's no magic to raising the score. It's paying your bills, keeping your credit utilization low, and time in.

You can however, get financed at a "buy here - pay here" place. You'll just pay for the honor of doing business with them.

Good luck.

[LadyInTheRed]

Do you keep that credit card balance to $30 or less? Keeping your utilization low is important. 10% is ideal.

Have you ordered copies of all 3 credit reports to make sure everything is correct?

You probably can get a car loan with your score, but the interest rate will be high. Making on time payments on a car loan will help your score and perhaps put you in a position to refinance the loan at a better rate.

[msm859]

I essentially did what frogger did but more aggressively. 6 months after closing got a $1500 secured visa from credit union. 6 months later refinanced car from same credit union for $7500 @2.99% for 18 months. Will be paid off next month - 6 months early. 14 months after close got 2 more secured cards - DCU for $5,000 and BofA for $3,000 and 2 unsecured cards Barclay for $4500 and Capital One $1000 (now $1500). DCU gives you free monthly credit scores. Now 2 years post filing my Equifax is 682. I have a lease expiring in December so I knew I had to get my score up when time comes to replace car.

You want to start as early as possible to get a few cards to start aging. And I believe having cards with higher limits help - for several reasons.

[gregemm]

I was recently in a similar situation. Had vehicle that was to be reaffirmed but bank not sticking to he judges conditions so it was rescinded. I do field work and not only need a vehicle, need to have a vehicle I can trust to drive sometimes 600 miles a week. Granted the terms were far from ideal but I got financed through Capital One under a month after discharge. Like I said not ideal but for me to came down to get a car or get a new job. I never in a million years would have expected to get an approval. Payment isn't even a whole lot more than what I was paying before

They also offered me an unsecured card (low limit) literally the week I got discharged. Also a condition of work; sometimes I need a CC for hotel stays, rental cars etc for work. Have the card tucked away in my travel tool bag

[Motivatedx3]

Did you file Ch7 or Ch13?

[Epic]

I essentially did what frogger did but more aggressively. 6 months after closing got a $1500 secured visa from credit union. 6 months later refinanced car from same credit union for $7500 @2.99% for 18 months. Will be paid off next month - 6 months early. 14 months after close got 2 more secured cards - DCU for $5,000 and BofA for $3,000 and 2 unsecured cards Barclay for $4500 and Capital One $1000 (now $1500). DCU gives you free monthly credit scores. Now 2 years post filing my Equifax is 682. I have a lease expiring in December so I knew I had to get my score up when time comes to replace car.

You want to start as early as possible to get a few cards to start aging. And I believe having cards with higher limits help - for several reasons.

Thanks for sharing your details. Did you apply for unsecured DCU and BofA cards and get denied?

[Logan]

I have paid all of my bills on time, and I have one credit card with a $300 limit.

That's about it.

In order to rebuild credit you have to get credit. You may be able to get a car loan at a reasonable rate and that will be a big step towards rebuilding.

Logan

[msm859]

Thanks for sharing your details. Did you apply for unsecured DCU and BofA cards and get denied?

No, I applied off the bat for secured cards. I wanted higher credit limits then you typically get out the gate with other cards following BK. Interestingly, my Barclays card which came after BofA and is unsecured, just raised my limit to $5700 after 6 months.

[Amy26]

I never had to get any secured cards when I started rebuilding. It is not a necessity to post BKers to go the secured route. However, as the other posters mentioned sometimes it is the best course but I wouldn't do secured cards unless I exhausted all other avenues. I first went with Hooters (unfortunately they don't offer them anymore), HSBC and Capital One. Then started attacking credit unions... CUs are the best bet for BKers if you find the BK friendly ones. Now I have limits of 30k, 20k but yea as Logan said you need to get more credit to rebuild it.

[artgood]

In order to rebuild credit you have to get credit. You may be able to get a car loan at a reasonable rate and that will be a big step towards rebuilding.

Logan

Really? The estimator on myfico.com said a car loan would drop my credit score by 20 points or so?

[Logan]

Really? The estimator on myfico.com said a car loan would drop my credit score by 20 points or so?

Initially it would but it would improve your score in the long run. I would never recommend getting debt just to rebuild credit. I don't consider using a credit card debt if you pay it off every month like I do.

Logan

[TBA]

your score is dynamic, it constantly changes. remember, it predicts risk, or the likeliness you will go delinquent - if you apply for lots of credit at once, your score thinks... OH NO!!! What is going on with this person? why do they need all of this credit all of a sudden. Once you prove you can pay the debts you have taken, you score says, ok, not so risky after all, and starts to improve. You really are going for long term solutions - good new replaces bad old, so the more new credit you build, the better your score will be down the road.

But dont be tempted to max out your shiny new cards... Activity and payment history is all you need - one tank of gas a month, and pay that puppy off. You dont want to start falling back into the cycle that got us all here in the first place