Outline for Rebuilding Credit

[shipo]

The following is kind of a distillation of various bits of post-discharge advice (from my "do as I suggest, not as I did" department) I've helped other folks out with:

Following your discharge:

• Wait 6 weeks and then get copies of all three of your credit reports from annualcreditreport.com
• Go through those reports with a fine-toothed comb and make sure all accounts which were open when you filed for bankruptcy are showing some sort of an IIB (Included In Bankruptcy) notation and the amount owed is $0.00; if not, contact the lender and/or the Credit Reporting agency and ask them to update your reports.
• Once you confirm all of your discharged debt is properly reporting, you can start applying for credit (technically you could have started the day of your discharge, but it is best to let the dust settle a bit first; some folks get approved right away, others, me included, get lots of rejections).
• CapitalOne is a good first stop for credit; of late they have been widely reported to grant their no annual fee Quicksilver 1.5% cash back card to those with fresh discharges, and often the starting unsecured credit limit is $3,000.
• If you can afford it, I would also recommend a “high limit” secured card with a $5,000 limit (and identical security deposit). Getting such a card helps from the perspective of you showing a high(ish) limit card on your credit reports, it can also be handy when the card graduates to unsecured as the limit will remain unchanged, you’ll just get your security deposit back. Good secured card financial institutions include, but are not limited to, FNBO, TDBank, NFCU, Discover, and of late, US Bank.
• With two cards in hand, you’ll still want a third as three cards is widely considered to be the minimum number to have to gain the most points for your credit scores. Credit Unions are a good place to look for this card, I got my third from PenFed, Navy Federal is also another favorite if you didn't burn them.
• The next decision you’ll need to make is what to do about an installment loan; you’ll need a minimum of one for credit score improvement purposes. A mortgage, car loan, or personal loan all qualify as installment loans; if you don’t have either a mortgage or car loan, a good starter installment loan is an SSL (Secured Share Loan) from the likes of NFCU or PenFed.
• With three credit cards in hand, and an installment loan, your next stop should be into the proverbial garden, basically, let the credit accounts you have age and watch your scores grow; hang out there for at least a year and you’ll be much better able to score car loans and mortgages at good rates.

Feel free to add other helpful tips to this thread for those rebuilding after their discharge.

[dixon10]

Cool, just recently applied for capital one got rejected twice… they saying that it’s non discharge bankruptcy on my report… I told them I have the discharge letter… imma mail it to them with my application number

[shipo]

Happened to me as well. You should wait four to six weeks for the dust to settle, then apply.

[dixon10]

Apply again, or submit documents for clearance previous application

[dixon10]

Also I got approved for navy federal and chime…. For credit building cards… discover card pending for verification… omg that’s another story lol smh

[shipo]

I applied to CapOne too soon after my Chapter 13 discharge, got denied, appealed with proof of discharge, got denied again. I reapplied a month later (another round of hard pulls), different story, instant approval with a $1,000 limit. The limit ended up being of no real use to me, so I closed it after less than 7-weeks and refocused on a high(ish) limit $5,000 secured card from TDBank; that is the card which got the ball rolling for me.

Then there was Discover; I applied 7-months after my discharge after I'd received a "pre-approval" letter in the mail; instantly denied for even a secured card. I tried their pre-approval site off and on for a few more months and was always shown nothing available for me. After all of those Discover denials, CapOne resurfaced; they sent me a pre-approval for a Quicksilver card, I bit and was instantly approved for a $3,000 limit.

[dixon10]

Cool thanks

[Johnworker1]

I applied for a Capital One right after the discharge off of the Experian credit site and was denied with cause being a non discharged bankruptcy and then read this and waited a few days to reapply and was approved. I immediately applied for a Ally credit card since I have been mailed the pre approval status for weeks and was granted m 2nd. So I started with 2 credit cards with $4,500 total credit to start with. I did all my purchases on both to build up a balance to pay off. I financed a used car with new car warranty through Capital One since they financed my last car after my Bankruptcy was thrown out in 2016 (long story) and waited a few weeks to apply for the 3rd credit card and all but a Capital One Platinum denied me on the Experian credit site so I was granted a 3rd credit card with a limit of $400 (ever little bit helps). I am so thankful to read these post and will be applying the strategies here to raise my post discharge 690 credit score.

[dixon10]

Cool, I got secured card with navy federal and pledge loan… my score now 640 and 676
i trying to wait to graduate for new card… I want all 3 of they credit cards

[dixon10]

I do want another card but I don’t know from who? Capital one denied me 3x

[shipo]

dixon10, have you tried Discover and/or PenFed?

[justbroke]

Definitely try the Discover pre-qualification tool. You can also try Amex's pre-qualification tool. I like these because they don't impact your credit unless a card it selected and you then go to final approval.

[CruzingThru]

Just came to add some anecdotal. In the same month as the discharge and we got approved for Capital One Savor, 3k. Using preapproval tools, we can't get anything with Discover or Amex (both were in our burn list fwiw, while CapOne was not..not sure if there's a correlation there). Will work towards a secured card and a third card with credit union as suggested above and report back with any luck.

[justbroke]

AMEX has a blacklist that is legendary. It is second only to credit unions when it comes to a practical permanent ban. For credit unions you generally have to pay back the debt to get back in their good graces. The (direct) ban on AMEX-issued cards will typically last 15-20 years.

[lillymarlene]

I believe it, about credit unions. I have, still have a business checking account with a credit union. I also had a personal checking account with the same institution. Then, I did my Chapter 13 starting in 2010. I closed the personal account since it had nothing in the checking account. I kept the business account, but surrendered the attached debit card, since it had allowed me a small $1,000 line of credit. I kept the business account, since it will still allow me to buy things from vendors for my online business. About ten years ago, after my discharge, I asked for another debit card for the checking account. I was not even applying for credit. I was never sent one. Then I applied for a car loan, at a place that claimed: We finance anyone! ....I guess not me. The salesman told me it was this one place that was stopping me. The credit union, claimed that I still owed them, $1,500! My bankruptcy was a business bankruptcy and this line of credit was not supposed to be on my report. The credit union about 5 years ago, has since become a bank, do not know if that affects anything. I would like to get a debit card for that account, but don't know if I should.

[shipo]

Just came to add some anecdotal. In the same month as the discharge and we got approved for Capital One Savor, 3k. Using preapproval tools, we can't get anything with Discover or Amex (both were in our burn list fwiw, while CapOne was not..not sure if there's a correlation there). Will work towards a secured card and a third card with credit union as suggested above and report back with any luck.

It has been nearly ten years since I filed my Chapter 13 and AMEX (as justbroke correctly stated has a very long memory) is still refusing me credit. Honestly I don't need or even want any additional credit, however, it would be nice to be able to get a Delta SkyMiles card (which I applied for a couple week back and they told me to get lost). Fortunately not all banks have held a bankruptcy against a former card holder; some times folks get back in, case in point, justbroke got back in with AMEX and I got back in with Chase. Speaking of Chase, since I can't get a Delta SkyMiles card, I was recently approved for a United Mileage Plus card, so it looks like I'll be flying United from here on in.

One final point about AMEX; I've read a number of anecdotal reports from folks who burned them for less than $10,000 who got approved 61 (or more) months after they filed. If you fall into the sub-ten-grand-burn category, wait five years plus a month and then reapply.