Credit Score

[Chuck]

I used to be a finance Manager at a car dealer.

Back then we loved customers with recent (within the last 2 years) bankrupcies. It was easier to get them a loan than it was people with 650 credit scores. It didn't really matter what their score was so long as it was over 520 in one of the bureaus and tey could prove their income (not self employed) take their check stubs multiply income by 15% thats the payment they could have at about 12.5% interest and they left in a car. It was very easy.

It is not like that at all anymore. Hell the reason I had to file was because the business got sooo bad I couldn't make a living. It wasn't that there were no customers, there were no customers that had 700 scores or higher. That was all the banks wanted to deal with, everyone else was usually turned down or atleast had to be in a very good LTV position.

My friends in the business say that now it is somewhere in the middle of those two scenarios. Not nearly as easy as 3 years ago, but not nearly as tough as 2 years ago.

My suggestions for rebuilding credit with purchasing a car in mind is this.

1. Pay the remaining 8 payments on your current loan perfectly.
2. Do not aquire any new credit. New accounts almost always initially lower your score.
3. Your score will take betweem 100 and 200 pt hit for a bankruptcy depending on your previous credit history. Remember that the formulas that add up to your score compound negative items. The more negative you have the more it lowers your score. Also the date of the negative items have a huge effect. If your score in January is 600, and you do not have any new negatives, no new accounts, and no increases in balances, in Feb your score will be at least 601. I know that doesn't sound like much, but each day that passes without a negative figures into the formulas that keep your score down. The longer it has been since the negative item, the less affect it has on your score.


I will shut up now. Sorry so long.

[FS09]

I've been living WITHOUT credit cards for 3 years now (OK, I still have a $300 and a secured $200 card to have some positive credit reported) and yes, it's possible and comfortable (say good buy to "due dates"..)...

I only have a loan on an old car which I'm planning on paying off by the end of the year.

But to the OP: If you are looking for a car after your CH7 discharge, I wouldn't be too concerned. I heard of others who purchased a brand new car the first week after their discharge with 0% financing through Ford Credit.

So if you have a good history in car-financing (no recent repos), I wouldn't be too concerned.

I will be letting a car go back to Honda Financial in the BK. However, I have had impeccable credit for the last 20 years, always gotten great rates on car loans and mortgages. Not that any of that will help after BK since my finances imploded 6 months ago...

[backtoschool]

I just filed chapter 7 last week, and checked my credit reports today and my credit score is showing the bankruptcy on two out of three of the reports already. My score actually went up 50 points to the mid 500's since filing. Go figure. I had stopped paying all my credit cards before I filed, so my credit score had already tanked before filing.

I have been living for a year without using credit cards, and its actually much better for me to budget than when I was using the cards. Granted, I am unemployed now, and have a much smaller budget, but I found that no matter how hard I tried to not spend more when I had credit cards, I always spent a bit more each month (or a lot more sometimes) than I had budgeted for. Now I can't do that and it makes it all easier.

I was really surprised that my score went UP after filing. Credit scores are so weird....

[IBroke]

I've been living WITHOUT credit cards for 3 years now (OK, I still have a $300 and a secured $200 card to have some positive credit reported) and yes, it's possible and comfortable (say good buy to "due dates"..)...

I only have a loan on an old car which I'm planning on paying off by the end of the year.

But to the OP: If you are looking for a car after your CH7 discharge, I wouldn't be too concerned. I heard of others who purchased a brand new car the first week after their discharge with 0% financing through Ford Credit.

So if you have a good history in car-financing (no recent repos), I wouldn't be too concerned.

[RainMoM]

I could care less about getting any credit cards any time soon.. My reason for wanting to rebuild our credit is, A: I'm currently renting my house, and I'd like to move one day an be able to rent a nice place without having to fork out a lot of extra money to do it ! B: I may need to buy a car again someday, I really would like to get a decent % rate.. That's my reason for wanting a better fico score! as for CC nope.. not for me

[shabam]

This whole talk of credit and getting credit and keeping credit is what put me where I am today! For so long I paid my credit cards BEFORE I paid my mortgage and cars. How stupid was that? Always so fearful of keeping my score high.

Be it good credit or poor credit, I believe a credit score is a scam to suck money out people. It allows (promotes) those with good credit to spend more and pay it off faster, all in the name of 'keeping their good credit'.

The system discriminates against people with bad credit, people who can least afford it, and keeps them in an endless and infinite debt bondage. An example of this is our insurance skyrocketing and jumping as our credit score worsens. Apparently a low credit score equates to bad driving. I have not had one accident in 15 years but this does not seem to mean much, unlike my poor credit. The funniest thing about the insurance example is that most people I know of (or their kids) that have totaled their vehicle are usually from wealthy families.

[shabam]

The only thing I am looking to do is get a car. I will be letting a leased 2008 Acura MDX go in the chapter 7. I have another vehicle under 60 month financing through Capital 1 that I am keeping, never been late, and only have 8 payments left! I'm hoping to get a loan from them for a $10K or so vehicle for my wife. I realize that I will be "damaged goods" for many years due to the BK. That is fine. I really don't want to go into debt with credit cards, mortgage, etc anymore. I really don't want a car loan, but my wife drives 20K per year hauling my 3 kids and really needs a safe/reliable vehicle.

Yep I see, this is a good reason to rebuild credit.

For a second I thought you were simply keen on getting credit again. Definitely do not want to see anyone in this mess again.

[bxphae]

We are a few weeks post discharge. The discharge is already listed on our credit reports and our scores are 650, 677 and 580.

Do you remember what it was right after you were discharged?

It seems to me that the lowest point is right after filing, then it seems to bounce back to "poor" to almost "average" months after discharge.

Myfico had a simulation for my EQ, 651 is where I stand with them, I would be near 477 if I filed according to that simul. I don't have any late payments on record at that moment with EQ.

[aces67]

We are a few weeks post discharge. The discharge is already listed on our credit reports and our scores are 650, 677 and 580.

[Ann]

This whole talk of credit and getting credit and keeping credit is what put me where I am today! For so long I paid my credit cards BEFORE I paid my mortgage and cars. How stupid was that? Always so fearful of keeping my score high.

[RainMoM]

I checked my hubby's score the day before we filed, and it was 497 We have never had a great score to begin with, around 630.. My question is.. What can i do to help bring up the score ? Besides paying on our two cars on time, I have nothing else to pay that can bring up my score ! what can i do ?

[RainMoM]

The only thing I am looking to do is get a car. I will be letting a leased 2008 Acura MDX go in the chapter 7. I have another vehicle under 60 month financing through Capital 1 that I am keeping, never been late, and only have 8 payments left! I'm hoping to get a loan from them for a $10K or so vehicle for my wife. I realize that I will be "damaged goods" for many years due to the BK. That is fine. I really don't want to go into debt with credit cards, mortgage, etc anymore. I really don't want a car loan, but my wife drives 20K per year hauling my 3 kids and really needs a safe/reliable vehicle.

i love that car, Acura MDX ..

[FS09]

The only thing I am looking to do is get a car. I will be letting a leased 2008 Acura MDX go in the chapter 7. I have another vehicle under 60 month financing through Capital 1 that I am keeping, never been late, and only have 8 payments left! I'm hoping to get a loan from them for a $10K or so vehicle for my wife. I realize that I will be "damaged goods" for many years due to the BK. That is fine. I really don't want to go into debt with credit cards, mortgage, etc anymore. I really don't want a car loan, but my wife drives 20K per year hauling my 3 kids and really needs a safe/reliable vehicle.

[keepmine]

As others pointed out, a credit score is going to be immaterial for awhile. That nice shiney bk in the public records section of your credit report will preclude many creditors from doing business with you for a few years.

For me, I filed in Oct of 05. About 6 weeks shy of the 2 year mark of my filing, my wife's car died and we needed another car. I applied at a local bank where I'd had an account for 20 plus years and, a local credit union. Neither had any debts that were included in my bk. The adverse action letter just said, recent bk as the reason for the decline. I found out later that the 2 year mark post bk is when they'd consider loans. But, we went to Cap 1's blank ckeck program and were fianced at a great rate { loint loan-she never filed and has great credit} for a used car and I did include Cap 1 cc debt in my filing. Go figure!
About a year or so post filing, I applied for a Barnes and Noble branded M/C and was denied by Barclays Bank. In Feb 08, about 2 1/2 years post filing I got approved.
Plus, then was then and now is now. I think getting access to unsecured credit is gonna be tougher in the economic climate. Heck, people with got credit scores and no derogs on their reports are getting limits cut and interest rates raised.

[shabam]

You have to remember that score does not mean much post-bk, particularly ch 7. It is going to take a number of years for someone to prove they are credit worthy.

You could have a 750 credit score but the second a creditor seems the bk on your file, it will affect their decision. For example, a 630 without a bk mark is way better than a 700 post-bk.