Two year credit rebuilding journey

[trying_to_fix]

So I just hit my two year mark and wanted to outline my credit rebuilding journey for those who are just going through what I had to.

I went through a Chapter 7 so I saw the opportunity to start over as a way to make sure I don't ever fall into the same situation again.

About one month after discharge I had scores in the low 500s and things did not look good at all. But I got some offers in the mail and accepted some of them. As a result within one month I had the following credit lines:

Orchard Bank - $300 limit
First National Bank (Legacy Credit Card) - $350 limit
Credit One - $1000 limit
Bryant State Bank (Show Credit Card) - $1300 limit

I also found a newer vehicle and financed part of the purchase with Wells Fargo for around $25k.

My income at this time was around $100k with only a $1400 monthly mortgage.

Two years later my scores are in the mid 700s and although I still can't get a Capital One card (they send me offers then deny me because I did BK them) here is where I stand now:

Orchard Bank - $700 limit
First National Bank (Legacy Credit Card) - $600 limit
Credit One - $2500 limit
Bryant State Bank (Show Credit Card) - $2300 limit
GE Money Bank (Rooms to Go Card) - $4500 limit
Wells Fargo Auto Loan - $25k original amount

Income now is at around $130k while mortgage remains the same.

So I'm still not in the perfect credit position I would like to be in terms of my limits but things are absolutely looking up. Hopefully in a short period of time I'll be eligible for larger limits and more "name brand" banks. But for now I just use these cards as I need to, pay more than minimum payments on a monthly basis, and keep a small balance on them to show I'm being responsible.

For those just starting out, look at this experience as the perfect launchpad for starting over!

[IBroke]

Great job!

That is strange though with your CapOne-experience. I BK'd them as well (Auto-loan AND CC) but they instantly approved me for a partially secured CC even without a prior pre-qualification letter. I deposited $49 and got a $200 CL. Not much but I was surprised they approved that at all 2 weeks after discharge.

[BankruptinNJ]

So I just hit my two year mark and wanted to outline my credit rebuilding journey for those who are just going through what I had to.

I went through a Chapter 7 so I saw the opportunity to start over as a way to make sure I don't ever fall into the same situation again.

About one month after discharge I had scores in the low 500s and things did not look good at all. But I got some offers in the mail and accepted some of them. As a result within one month I had the following credit lines:

Orchard Bank - $300 limit
First National Bank (Legacy Credit Card) - $350 limit
Credit One - $1000 limit
Bryant State Bank (Show Credit Card) - $1300 limit

I also found a newer vehicle and financed part of the purchase with Wells Fargo for around $25k.

My income at this time was around $100k with only a $1400 monthly mortgage.
Two years later my scores are in the mid 700s and although I still can't get a Capital One card (they send me offers then deny me because I did BK them) here is where I stand now:

Orchard Bank - $700 limit
First National Bank (Legacy Credit Card) - $600 limit
Credit One - $2500 limit
Bryant State Bank (Show Credit Card) - $2300 limit
GE Money Bank (Rooms to Go Card) - $4500 limit
Wells Fargo Auto Loan - $25k original amount

Income now is at around $130k while mortgage remains the same.

So I'm still not in the perfect credit position I would like to be in terms of my limits but things are absolutely looking up. Hopefully in a short period of time I'll be eligible for larger limits and more "name brand" banks. But for now I just use these cards as I need to, pay more than minimum payments on a monthly basis, and keep a small balance on them to show I'm being responsible.

For those just starting out, look at this experience as the perfect launchpad for starting over!

I'm a little confused. How did you do a Chapter 7 with a six figure income? I thought that if you made a certain amount you had to do a Chapter 13. Or did you get that job after bk?

[justbroke]

I'm a little confused. How did you do a Chapter 7 with a six figure income? I thought that if you made a certain amount you had to do a Chapter 13. Or did you get that job after bk?

Many people with six-figure incomes, such as myself as well, have received Chapter 7 discharges. While mine was a non-consumer case, I could have also done a consumer case.

Receiving a Chapter 7 discharge is about your allowed expenses versus your income. Many people believe that a Chapter 7 discharge is about being under-the-median. It is not about that. I have seen under-the-median cases get dismissed for abuse (high disposable monthly income). Usually, people with high income, also have high mortgages and other expenses, which offset the issue. Also where you live, is an important factor as costs for housing and even cars is different (all the way down to the County level).

While over-the-median income filers don't get Chapter 7 discharges at the rate of under-the-median income filers, it happens every single day. Both consumer and non-consumer cases alike.

[BankruptinNJ]

Many people with six-figure incomes, such as myself as well, have received Chapter 7 discharges. While mine was a non-consumer case, I could have also done a consumer case.

Receiving a Chapter 7 discharge is about your allowed expenses versus your income. Many people believe that a Chapter 7 discharge is about being under-the-median. It is not about that. I have seen under-the-median cases get dismissed for abuse (high disposable monthly income). Usually, people with high income, also have high mortgages and other expenses, which offset the issue. Also where you live, is an important factor as costs for housing and even cars is different (all the way down to the County level).

While over-the-median income filers don't get Chapter 7 discharges at the rate of under-the-median income filers, it happens every single day. Both consumer and non-consumer cases alike.

Thanks for answering! When the post said that they had a six figure income and only a $1400 mortage (!) I was really surprised. Especially since it is so much cheaper to live in the South.

[justbroke]

I live in the South, but my mortgage is substantially higher that what most people think Southerner's pay for a large home. Generally speaking, the higher your income, the higher your expenses.

[trying_to_fix]

To answer the question above, I was actually surprised as well that I had qualified for Chapter 7.

As mentioned above it was all about expenses. On top of the mortgage for the home there was also a rental home and numerous bills that unfortunately just got out of control after I went through a failed relationship. When I filled out the means test I just barely qualified but fortunately was able to start fresh again.

One thing that is for certain is that I'm doing everything in my power to never end up in this position again!

Great job!

That is strange though with your CapOne-experience. I BK'd them as well (Auto-loan AND CC) but they instantly approved me for a partially secured CC even without a prior pre-qualification letter. I deposited $49 and got a $200 CL. Not much but I was surprised they approved that at all 2 weeks after discharge.

Thanks!

Yeah I'm not sure what CapOne's problem is. I just received yet another offer for a card but I've applied twice now and both times have received an automatic denial. So maybe in time but for now they're really upset with me. Strangely enough however I have a money market account with them with a decent amount in there so I thought that would count for something...But I guess not!

[calgirl67]

I'm a little confused. How did you do a Chapter 7 with a six figure income? I thought that if you made a certain amount you had to do a Chapter 13. Or did you get that job after bk?

We too had a six figure income. Our expenses were sky high. We passed without a hitch. The trustee didn't even blink an eyelid.

Helps we had an extremely competent and thorough attorney (he was not cheap but worth every cent). He laid it all out correctly and used the allowed exemptions.

[Flamingo]

To the OP - you have to remember that your Chapter 7 left you debt free and over the past two years since discharge you have a high income; so your scenario is nice for you but it won't be the launching pad you indicate for everyone. What you have received so far as to credit was based on you being debt free with a high income and the fact that you cannot file BK again for another 8 years. Your high income is a really big factor. Those with lower incomes may not fare as well as you. And as long as you have a BK on your credit report no matter how much you make or how good your score is, there will be creditors that will deny you credit just due to the BK. That is marvelous you are doing well and best of luck to you!

[CCsAreEvil]

Just like the 1st post, as I've stated in another thread, CapOne's modeling system may actually have a blacklist checkmark. I BK'd on them over a year ago now, and they still reject me. Maybe "we" need to just put them on the ignore list and stop trying to bother with them.

Again, it doesn't make sense, but we don't know how CapOne is making their decisions (why they accept some and not others).

[trying_to_fix]

Just like the 1st post, as I've stated in another thread, CapOne's modeling system may actually have a blacklist checkmark. I BK'd on them over a year ago now, and they still reject me. Maybe "we" need to just put them on the ignore list and stop trying to bother with them.

Again, it doesn't make sense, but we don't know how CapOne is making their decisions (why they accept some and not others).

Since starting this thread I've received two more Cap One offers. But I'm not counting on them to accept me any time soon...

Fortunately they don't pull a real inquiry when you apply with them so it doesn't count against you. They just automatically blacklist and never pull your credit.

I almost feel like writing them and telling them they don't make any sense sending me offers yet denying me - but it's probably not worth my time and effort.

[SPalin]

It's just CrapOne's way of playing with yah! They denied me too, and I did bk three cards on them, so they are on my don't even apply list no matter what they offer!

[Amy26]

I also filed with a six figure income but you have to remember that its based on six month look back. I had been laid off from my job for over 8 months prior and was ineligible for unemployment. So, even though I got a new job about a month before I filed my look back was basically zero income.