Reopening BK'd Accounts?

[BobMango]

Anyone have experience getting credit card companies to re-open accounts after filing if you offer to pay the balance?

I know some cards will black ball you once you file, but which ones might be willing to reopen accounts if you pay everything? I've heard Discover will, but are there others?

And if you were successful in getting a card account reopened, do they report your entire credit history with them, or just since the bankruptcy? Seems to me the advantage to getting an account reopened is to get some history back, since that is a major factor in scoring.

Bottom line is that I want to purchase a new house in the next 2-3 years, but I really don't want a new credit card if I can avoid it. Since the biggest factor in your score is payment history, if I can reopen an old account by settling and get some history with it, it might be worth paying it back. I had a couple of long term accounts with just a few hundred dollars balance when we filed. Seems it might be cheaper to negotiate with them rather than open new accounts, secured or otherwise.

Thoughts?

[AngelinaCatHub]

Bob, really, why would you wish to open CC's? Take your new start. What got you here in bk but help from those evil things called Credit Cards. Your credit score is going to be trashed anyway.

In two three years, you can save up for a nice down payment. The glut of empty houses will present bargains like you will not believe. Contract for Deed is an option and no credit needs to be checked. It is like "rent to own" and saves a lot of closing fees. I have purchase doing this and was quite happy. On the last payment, the owner supplies the Deed. If you needed to, you can walk away at any time without penalty.

A lot of things can happen in two or three. Hold off and stay solvent. I feel things will become much more "interesting". 'Hub

[BobMango]

I agree with you 'Hub. I know there are lots of options. I guess my real question is whether it would improve my credit score enough to make a significant difference in getting a new mortgage later. I'm not interested in supporting the industry that helped put me here (along with some of my own poor decisions).

[CCsAreEvil]

Anyone have experience getting credit card companies to re-open accounts after filing if you offer to pay the balance?

Are you crazy? Why would you ever agree to pay a balance on something you discharged? You'd be throwing that money away! If you have the money, then put that towards a secure card.

[Backtobasics]

Why do you want more Credit Cards?

[BobMango]

Ok, one more time. I don't want any credit cards. I haven't used a credit card for more than a year now and it's not like I'm going through withdrawls. And anyway, it was mostly job, business and real estate losses that pushed me to bankruptcy, not cc debt.

The basic question is related to wanting to obtain a new mortgage in the next few years.

My question really was this "If I can get a creditor to reopen an account that I bk'd by paying it off, is there any chance that I'll also get history from before the bk as well?"

If I could negotiate with a credit card company to reopen and report an account that I had for 15 years, would that significantly help my scoring, making getting a mortgage cheaper and easier?

Has anyone done this successfully?

I don't really need any more snarky "why do you want a credit card?" comments that aren't addressing the question.

Thanks.

[HHM]

Stupid idea. Stupid, Stupid, Stupid. (the credit score doesn't work the way you think).

You will be eligible for FHA mortgage in 2 years from your discharge (3 years from the foreclosure). NOTHING you can do with your OLD debt will change that.

[StartingOver08]

I have only heard of one program that will add the old history if you pay it - the American Express oasis program where if you pay off the old debt then you get a new card but it has all the old history. HOWEVER, I don't think it is available if you have discharged the debt in bankruptcy, but I don't know that for sure.

It certainly is worth checking into with the cards you had for many years. I understand your reasoning, because it certainly would be a benefit to add 15 yrs history right after having been discharged! You might want to check some of the credit boards around to see if someone has successfully done what you are proposing.

[jadams]

If you needed to, you can walk away at any time without penalty.

I guess if you don't consider loosing whatever percentage of payments you've made towards the contract a penalty.

If the owner sets a price/payments that are comparable to what you would have otherwise paid in rent, then it's not bad.

But this is why "sellers" love to offer contract for deed to risky "borrowers". There's a darn good chance they'll need to leave prior to completion of the contract, and then the seller gets to keep the property and the money. Usually the payments having been at a significant premium relative to rent in the area.

You also loose lots of rights in most states since you aren't a true renter nor are you the owner with a lender's lien.

They are not the simple happy instruments you present them as -- they are just as risky, if not more so, then most other forms of borrowing.

Sometimes a good option, yes. But people need to be very careful with them.

[BobMango]

Stupid idea. Stupid, Stupid, Stupid. (the credit score doesn't work the way you think).

You will be eligible for FHA mortgage in 2 years from your discharge (3 years from the foreclosure). NOTHING you can do with you OLD debt will change that.

You are missing the point. I'm not trying to reduce the amount of time between BK and a new mortgage, I'm looking at ways to make it easier and less expensive to get a mortgage in 2-3 years. I understand that the bankruptcy will continue to have an adverse impact regardless of score, but it seems to me the difference between a 650 score and a 700 might be worth something.

So if I don't understand how credit scoring works, help me out. My understanding was that payment history accounts for 35% of your score. If I can pay a couple of hundred dollars to give my score a boost might that not mean a favorable difference of some percentage on my next loan in 2-3 years? And if that's true, then an investment of $200 could save thousands later.

Is this idea more stupid than getting a secured card with a couple of hundred dollars in fees and tying up cash in an effort to improve credit scoring?

[HHM]

Time will heal your credit.

The bankruptcy pretty much puts a kabosh on your prior history, REGARDLESS of what you do. Don't worry about it. What you need is "present" use of credit.

You will be back to market rates in 2-3 years anyway. Most peoples scores will be back in the 700's within 18-24 months after BK as long as they make sure everything is reporting properly post discharge, and they have some post discharge credit use. Your priorities are a bit skewed, focus on saving money...a nice down payment goes a long way.

As for "payment" history...guess what, that is only tracked for 36 months. What you are probably thinking about is overall account age. Account age is a minor factor and the BK pretty much puts a break in your credit report anyway.

[BobMango]

Now that was a useful response, thanks!

[oldhack]

... I'm looking at ways to make it...less expensive to get a mortgage in 2-3 years. I understand that the bankruptcy will continue to have an adverse impact regardless of score, but it seems to me the difference between a 650 score and a 700 might be worth something...

Actually, probably not, unless you wish to wait even longer -- usually at least 4 years -- to apply for a conventional mortgage loan. FHA and the other government mortgage-guarantee programs (which are going to be the ones for which you qualify soonest) offer a single rate to all who qualify -- you get no premium rate for having a higher FICO score.

[AMISLANDER]

Anyone have experience getting credit card companies to re-open accounts after filing if you offer to pay the balance?

I know some cards will black ball you once you file, but which ones might be willing to reopen accounts if you pay everything? I've heard Discover will, but are there others?

And if you were successful in getting a card account reopened, do they report your entire credit history with them, or just since the bankruptcy? Seems to me the advantage to getting an account reopened is to get some history back, since that is a major factor in scoring.

Bottom line is that I want to purchase a new house in the next 2-3 years, but I really don't want a new credit card if I can avoid it. Since the biggest factor in your score is payment history, if I can reopen an old account by settling and get some history with it, it might be worth paying it back. I had a couple of long term accounts with just a few hundred dollars balance when we filed. Seems it might be cheaper to negotiate with them rather than open new accounts, secured or otherwise.

Thoughts?

You don't "re-open" bk'd accounts. Plain & simple. Once you file & close it's over & done. If you could pay off the balances why would you even file on the cards.

[BobMango]

You don't "re-open" bk'd accounts. Plain & simple. Once you file & close it's over & done. If you could pay off the balances why would you even file on the cards.

Did you even read the thread?