Unexpectedly High Credit Scores Post Filing, Pre-Discharge

[Am2022]

I hope that I am not jinxing myself, but my credit scores have been extremely weird since filing my ch7 at the end of August. By way of background, I guess I am considered a high income filer, making just over a 100k a year, supporting a household of four, wife is unable to work. I have a leased vehicle, a vehicle with a loan on it, and mortgage. I have never been late on anything, other than a couple of my unsecured credit cards in the last month or so prior to filing. Things were getting so tight that I just didn't have the money to pay them.

At the beginning of the year my TU and EXP score typically hovered around the 670 to 690 range. once I miss those payments and that hit, I got knocked into the low 500s. I had about 60 to 70k in unsecured debt when I filed.

Once my accounts started getting cleared out, even with remarks on each regarding the filing, my scores rebounded immediately. I have been sitting at a 700 TU for 2 weeks and my EXP just jumped to 650 today. Both reflect the filing as a derogatory remark.

Is this a short term anomaly, only to be enjoyed until the actual discharge is entered? Or was my credit just positioned in such a way that filing was the best thing I could do for my score?

I am going to be doing a redemption loan on my vehicle with a loan on it. while I currently pay 4.25 on the loan, I will be shaving off maybe 10-11K on what I owe on my 2015 vehicle with only 48,000 mi on it. Even with a userous interest rate of 23%, My 722 loan will be the same payment. The rub is that I want to refinance it as soon as possible after my discharge. Any rate at or around 10%, or even 12-14% would knock my current payment in half or more. If these scores hold, I should be able to do this sooner than I thought. Does anyone have any experience with this sort of situation?

[justbroke]

Those are good stores to exit Chapter 7 (or Chapter 13). One problem that you may experience is that you will get re-bucketed after the discharge, and definitely rebucketed probably at 2-years post-discharge and then when it falls off.

But don't worry about your FICO score right now.

Yes, those 722 Redemption loans are crazy, but what I did was refinance into a 7.49% loan 6-months post discharge. I had a redemption and the rate was about 19.75%.

[Am2022]

What do you mean by "rebucketed"?

[justbroke]

What do you mean by "rebucketed"?

FICO compares "like" debtors. You are being scored against others with a non-discharged bankruptcy. The other several different types of buckets. A bucket for those with 1x90 day late, one for those with a discharged bankruptcy, those without any bankruptcy or any late payments. It's a very interesting predictive system.

[Am2022]

So it sounds like you are saying that I will take a big hit once the discharge hits? Because the filing is already hitting.

[justbroke]

It's hard to predict because of the many factors that go into a bankruptcy. A person that files and had a 820 score with no late payments or any adverse information, might see their score drop 200+ points to something below 620. A person with a 650 score may see their score go down to 550+. Too many variables and not even the people at Fair Isaac could give you a complete way of how it works -- even if they do, they wouldn't give up their proprietary information.

We do know from many people (even those never bankrupt) that rebucketing is a real phenomenon. Some know it as scorecard reassessment but we call it rebucketing. The FICO score seems to rate consumers versus a like consumer pool... a bucket. A person with a bankruptcy on their credit report seems to be bucketed into never getting into the 800s (just an example). A person with a recent bankruptcy probably can't get over 720/740 because of how the buckets work.

This is from observation. shipo has some great information on rebuilding and has made it back into the 800s (when the bankruptcy fell off). Some debtors have found that when their bankruptcy fell off, their score actually went down as much as 40-60 points because they're in a different consumer bucket.