FICO Scores after BK Dropps off credit report

[aa06a47]

Heard some depressing news on the Suze Orman show tonight. She stated, that bk stays on credit report 7=10 years (we all know that). She said, as you go along, you build up your fico score...500-600-700-740...ect through time. The minute they take the bk off your credit report, your FICO score plummits.

She stated that when your in BK, your FICO is lumped with a group of BK people. When it drops off, you now get thrown back in with the general population of people who have not filed BK.

I have never heard this before, and I thought I would share it with the group.

[HopeinHorizon]

Never heard of it, but if you rebuild after bankruptcy and pay everything on time, you will have aged accounts up to 10 years old with great payment history, so if you are thrown back into the mix, your credit will still be good, because the only black mark was your bankruptcy...

I am not worried, I am rebuilding!

[notme]

Yeah I watched that show too. I never heard of that before but makes sense I guess. I just hope it wont drop that much. Only time will tell and I guess Ill just have to wait 10 years to find out.

[SinkingFast]

I hadn't heard that comment before, but it does make sense based on something else I learned working in Real Estate.

It's easiest to get a big loan, like car or home loan, closer to the time you filed and closed your BK. You know the drill. Re establish credit then you can buy a car or home within 1 to 2 years. Easier then to get those loans than further down the road. Because the Lenders all know you cannot refile. Once you get to point where you could refile, Lenders considering loaning large sums look at potential buyers with a lot more scrutiny.

I saw a couple with an early BK, beyond having it drop off their credit history, have to jump thru hoops other equally qualified couples wouldn't have been subjected to. Now I am talking conventional private source financing. Not Gov't loan programs.

So a drop in the Credit Score when you BK falls off does make sense.