Outline for Rebuilding Credit

[CruzingThru]

Wow, interesting that Amex could hold it against you for that long. Working on my glass half full self, nice to be part of something legendary. I was just under 10k with them, so interested to see if they let up anytime soon.

Hope to prevent others from making the same silly mistakes as I'm making. I applied for US Bank's secured card and got the we'll review and get back to you response. So thinking I got denied, applied for Chime's secured card. Joke's on me, Chime doesn't report utilization % as they don't have a pre-set limit per se. A lot of current customers complaining that their scores went down based on how Chime reports. You'll still get a boost from timely payments through them, just maybe less so than a traditional secured card. Though take what I say with some salt as my financial literacy is the equivalent of a shiny rock with a happy face drawn onto it. Also apparently it takes up to a couple weeks sometimes for the secured card process to go through (set up your account and debit, pull the deposit, send the cc, etc), so be patient. Now that I have potentially two secured cards in tow (I will keep US bank with high deposit and Chime with lower), would I still need a third card?

For the SSL, are there any recommended parameters on the amount or payment schedule?

[shipo]

A few answers:

• Three revolving credit card are considered by the experts in FICO scoring to be the minimum for maximum points, and while some folks get along with just one or two, it takes longer to see a score bump versus using three.
• I would avoid lenders like Chime, CreditOne, and other bottom feeders; they often do more damage to either your credit scores or your bank account than traditional lenders.
• Regarding secured cards, some folks opt for say three cards with secured limits of $500 or so, and then rebuild from there. Others prefer to swing a bigger hammer and opt for a single card with a multi-thousand dollar limit; I opted for the latter and got a secured card with a $5,000 limit, and without any hard evidence to support this, I believe that one card was the springboard from which sprang all of my subsequent unsecured cards.
• Regarding the SSL; the most common approach, and the approach I took, is to drop $3,000 (some folks say $3,001) into a savings account at either PenFed or NFCU, let it age for 30 days, and then take out a five year loan for that amount. Once the loan is approved, take the loan money and pay the balance to say, $250, this in turn will push the next payment date out several years.

[rodsren]

I have some questions:

• Regarding the SSL; the most common approach, and the approach I took, is to drop $3,000 (some folks say $3,001) into a savings account at either PenFed or NFCU, let it age for 30 days, and then take out a five year loan for that amount. Once the loan is approved, take the loan money and pay the balance to say, $250, this in turn will push the next payment date out several years.

The loan is absolutely necessary for a high c credit score? Also, my two non-most used scores (TransUnion and Equifax are around 720). My Experian, which I understand is the most used report (75% I read somewhere of lenders use), is at 618. Can creditors continue to report poor payment history and IIB? It seems like a double jeopardy situation, where they are penalizing you twice.

Very grateful for any replys-as I am new here and newly discharged in ch. 7 (7/29/24). I did get a CapitalOne Savor "for good credit"..HA....with the 3,000 limit as discussed even before it was discharged (that may have been a computer glitch but now is is 3 months old so I don't think they will cancel it. A 1,500 mission bank, which seems to be among the familiar characters, and a $1,000 limit from my credit union - they said I could apply for an increase in 6 months. At the time (not now) I had to take out cash to finance a new apartment. They are now hopefully charged and pay in full every month. I am looking at the PenFed and NFCU (once I find my dad's discharge papers, they are here somewhere I saw them fairly recently) and will explore the Loan option (I. assume that is what SSL stands for.) Any advice I am all ears.

This is such a great forum, thanks so much you all!

[shipo]

rodsren, based upon your post I'd bet dollars to donuts you aren't comparing apples to apples regarding your scores. Said another way, my bet is your TU and EQ scores are Vantage 3.0 scores while your EX score is a true FICO 8 score; if you were to get your FICO 8 scores from the other two credit bureaus I strongly suspect they'd be very near the 618 score you're seeing from EX

[Johnworker1]

I created a free account with Experian and not only can I check my credit bureau there free without limits they also have a tool that shows you which credit cards you may qualify for and your odds that is in the credit card folder (top of page). I also created an account with CreditKarma that has a similar tool to match you with credit cards and ranks your odds under the cards drop down folder. I got 2 unsecured credit cards this way the Credit One (bottom feeder) and Capital One Savor. Almost 11 months later now the credit card companies and my bank are offering me preapproved cards. I went from two 2K cards and a $400 card (Credit One) now to also include a 6k Capital One Quicksilver and a 9K Chase Freedom. Now that I recently financed a used car with Chase they show that I am preapproved for a 22K and a 25k card but they both have annual fees so I will take a pass (for now). Great information here that helped me get back on track.

[shipo]

I would advise ignoring all credit card recommendations; they are nothing but paid for services which attempt to match your profile to a very high level model, and as often as not, they are wrong. As an example, they are constantly recommending AMEX cards to me, and yet, AMEX has me blacklisted for the indefinite future.

[rodsren]

rodsren, based upon your post I'd bet dollars to donuts you aren't comparing apples to apples regarding your scores. Said another way, my bet is your TU and EQ scores are Vantage 3.0 scores while your EX score is a true FICO 8 score; if you were to get your FICO 8 scores from the other two credit bureaus I strongly suspect they'd be very near the 618 score you're seeing from EX

You are correct. I checked they are vantage three scores, not fico 8. Why do they even publish them if nobody uses them??

[shipo]

They publish Vantage because it is cheap.

[rodsren]

Thank you so much. Makes sense thought.

[rodsren]

rodsren, based upon your post I'd bet dollars to donuts you aren't comparing apples to apples regarding your scores. Said another way, my bet is your TU and EQ scores are Vantage 3.0 scores while your EX score is a true FICO 8 score; if you were to get your FICO 8 scores from the other two credit bureaus I strongly suspect they'd be very near the 618 scores you see from EX

I was. You are correct (apples and oranges, with the lower one for me at soon after discharge being the correct one, FICO8). NFCU declined my application, I don't know why. I sent a letter which was very polite, the DD-214, my birth certificate, a bank account and a copy of my recently renewed passport. I should be eligible (discharge was 7/29/24). I am n to asking for any credit products. T he one glitch: THIS MAY BE IMPORTANT: my mailing address is a private mail service. Also, Social Security (and I guess Medicare and IRS) have my Brazilian address. I didn't lie, I said my LA address was a mailing address. Now, I don't know if they have access to the Brazilian address, and I should say I am working on projects part-time here, but all mail (which means only the debit card-statements are all electronic these days) should go to LA, where I am at least every 6 months for several weeks. They said "Your application for membership has denied because we didn't receive the documents requested to verify your identity." "If you are still interested in joining, please submit a new application. You may be required to provide proof of address and identification." I don't know whether to go to the DMV in California and try to get a residential address (I believe at least Transunion has the address I use as "high potential fraud). Perhaps it's time for another mailing receiving service?

I am interested in joining as I hear about the high credit limits beyond Andrews FCU and Penn Fed and I feel irritated that my father served with an honorable discharge for 4 years in the Korean war and was recommended for re-inlistment on his DD214. Any advice? I hate asking friends for favors (and many don't want to receive debit cards at their addresses, but I think I need a real physical address on my CA ID/DL and maybe wait a couple of months to more? PenFed is already fundethe only one of the 3 that is open(, not with a lot but your several products (DC, Savings, Checking, $3,001 loan then payoff to $250) seems like a very good option. Is NAvy Federal a stickler about physical addresses-I know some banks are?

Thanks to all. Your advice and wisdom is greatly appreciated. Scott

[shipo]

A few comments:

• I have heard many financial institutions have an issue with off shore applicants, and while I haven't heard either way regarding NFCU, PenFed and others, it wouldn't surprise me to learn you need a domestic address to become approved for membership.
• Regarding high limits, NFCU is far more generous than PenFed; my PenFed limit is fixed at $6,000, my NFCU limit is $30,000.
• I would suggest next time you're in the States, stop into an NFCU branch and try and apply in person.

[rodsren]

A few comments:

• I have heard many financial institutions have an issue with off shore applicants, and while I haven't heard either way regarding NFCU, PenFed and others, it wouldn't surprise me to learn you need a domestic address to become approved for membership.
• Regarding high limits, NFCU is far more generous than PenFed; my PenFed limit is fixed at $6,000, my NFCU limit is $30,000.
• I would suggest next time you're in the States, stop into an NFCU branch and try and apply in person.

Dear Shipo:

Thank you. I was unaware they had so many branches compared with PenFed, which sailed through. I will be in Miami and in Los Angeles, so a trip to San Diego (with. limited access, I might get in or not) is kind of a trek. However, I have a doctor's appointment this Thursday in N. Miami, and they happen to have a location there. You can even make an appointment. Once again, thanks for your terrific advice. I'll let you know how it goes, you and others have mentioned both here and youtube that the NFCU limits are generous, which of course makes usage % lower and helps credit ratings, but that is far down the line. First, join and open checking and savings and possibly a small CD. Then, hopefully, come up with 5K in the USA, as that has been suggested as a good point for a secured card. As well as 3,001 in an SSL, which I still was unaware they existed. This website has been a very informative resource. Again, Gratitude for your help! Scott

[chb603]

Hi! I’m new here and approaching my ch13 discharge after nearly 5 long years on our payment plan- we did Ch13 to keep our house, financed with my VA loan in 2017. When you say wait 61M for Amex assuming you Britney them for under $10k, is that from discharge or date of filing? Thanks!

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.

[justbroke]

Hi! I’m new here and approaching my ch13 discharge after nearly 5 long years on our payment plan- we did Ch13 to keep our house, financed with my VA loan in 2017. When you say wait 61M for Amex assuming you Britney them for under $10k, is that from discharge or date of filing? Thanks!

There is no rhyme or reason as to how the American Express blacklist works. It is suggested to until 61 months after discharge since their system will show that date as possibly the last payment date. The only thing nice about the AMEX blacklist--if you can call it that--is you won't get dinged with a credit inquiry if you're on the black list. It will just immediately respond with something like "denied due to previous relationship" or prior account closure.

For me, I just kept trying and one day, they actually ran my credit. That when I knew that the blacklist was over. About 6 months later, I had an AMEX Platinum card and my Member Since date is still back in the 1980s!

[rodsren]

That happened to me once in the late 90's (I had a Member since date of 1982-I'm an old guy), but I had a payback plan with them in the 90's. Since then, I have not had a high income and have had to file ch13 twice (once in 2003, and once in April 2024). After 2003, they would only let me get as an additional user on a Shawbb Platinum card in 2015 that my sister was primarily on. Interestingly (at least to me), I just applied under my Florida address and middle name, and they actually ran my credit and came back right away (well, 30 minutes later) with the reason for the decline of "Bankruptcy." So maybe in August 2029, I might get it back in with Amex-I certainly have learned enough here about not needing to deal with CreditOne bank which is fake AMEX. AMEX did not sue me or my sister, although BofA did in my New York address, and the judgment became removable (Uncollectable) after 4 years per NYS law. JPMorgan Chase sued me and double (2 lawsuits x 2 cards) in California, as the amounts are almost identical for two lawsuits x 2 (or four judgments-and California law is only non-collectible after ten long years.) One needs to file a motion to discharge, usually notarized, with the courthouse (as they have little interest in clearing it up either the creditor or the court) and get a discharged judgment form from the clerk. You can send to these companies that feel they are doing a public service by tarnishing your name.- a lawsuit is an expensive & complicated process, I would forget about that.

[shipo]

Hi! I’m new here and approaching my ch13 discharge after nearly 5 long years on our payment plan- we did Ch13 to keep our house, financed with my VA loan in 2017. When you say wait 61M for Amex assuming you Britney them for under $10k, is that from discharge or date of filing? Thanks!

Filing date. In your case, unless you absolutely need an AMEX, I'd A) wait until you've reestablished credit with a handful of other financial institutions, and B) wait until your Chapter 13 falls off your credit reports (in about two years), before applying to AMEX. The good news is if you feel the need to apply sooner, AMEX has an instant internal review process which will decline your application immediately without a hard pull against your credit. As good as that is (from a bizarre perspective), I think poking the bear to let them know you're nosing around for a new card isn't always wise.

Congratulations on nearing the end of your Chapter 13 experience and please keep us posted on your recovery journey.

Edit: One other thought, given you have a VA loan I presume that also means you are eligible to join NFCU; if that's the case, I would recommend they be your absolute first stop when it comes to new credit.