Almost at 2 years, we aren't where we wanna be.....

[jojuvan]

It'll be 2 years in July from the date of our discharge, and while we DO have better credit, it's not anywhere near where I thought we'd be at this time. We started out great with the credit cards we got, but it never really progressed from there, and our scores have about stayed the same for over a year!

Husband has: 2 capital one $500 cards ($1,000 total)
1 Orchard Bank $500 card

I have: 1 Capital One $750 card
1 HSBC $300 card

Our capital one limits have gone up about $200 a piece, but that's it. We have both used our cards every way possible (used it, then paid it off; had no balance for a few months, carried a balance and paid it off slowly...etc). We have a car loan that we got right after bankruptcy for $11,000 and we both have student loans that are in deferrment. We've both tried to get store cards and other cards and have been denied. We have had NOTHING negative on our credit since the bk. Our scores are 602 and 609. WHY???????? Is it cause of the way we used our credit cards? the declinining inquiries for the other cards? My husband lost his job back in April, but we have still stayed out of debt and have been paying our bills on time. We just recently paid off the balances we did have on our credit cards with our tax refund.

We would LOVE to be able to buy a house at the 2 year mark in July (if my husband get's a job soon) but I just can't understand why our scores are not better than they are?

How do we get them higher, and would keeping $0 balances and having 0 inquiries for the next few months raise our score? And would the fact that my husband has been unemployed for the last 10 months hurt our chances of buying a house in July?

Thank you!

[SunshineGal]

Hi Jojuvan,

The problem with your score may be lack of a larger credit limit. Also, check to make sure the credit cards are reporting the limit instead of high balance, and that there isn't more than 30% owed on any one card. Inquiries DO hurt your score, as they age beyond 90 days, 120, etc...the inquiries are less damaging. So yes, keep inquiries down and your score should improve. Finally, here is the deal with your Husband and being unemployed. First, Unemployment does not count as income so you will have to do one of two things; either qualify for all debt including the house payments on your own, or wait until your DH finds a job. In order to use income from a new job it will have to be in a similar line of work, can't be commission income (you would need a two year history) and he must not be on probation.

One more thing, there can be a large difference between different score models. Lenders will generally use the middle of 3 for this reason. It's not unusual to see a fico of 609 with a beacon of 680 or vice-versa. If you look next to your score you will see numbers or codes that give the reasons for the score. Normally they will say something like balances too high to the amount of available credit; serious delinquency or derogatory items in file; length of credit history, etc.

[HHM]

Really difficult to answer your question, it could be any number of things.

Generally, when we see scores still relatively low 2 years out, that usually indicates problems with how the BK is being reported on the debts that were included.
The student loans being in deferment does not help (it is not the killer, but it doesn't help).

Were you seriously in default on accounts when you filed BK, was there a foreclosure.

As for buying a house...if your husband is unemployed, YES, that will be a BIG problem unless your income alone is enough to qualify.

[BankruptinNJ]

I'm a little puzzled why you are even thinking about buying a house at this point. Your husband is unemployed and you have a fairly recent bk. Your credit scores are still fairly low, and you have deferred student loans??? When your husband does get a job, I really think that instead of buying a house you should pay off your student loans FIRST, stop applying for more credit cards, continue to use your current cards wisely, and save, save, save. In a few years you will have your loans paid off, you will be farther away from your discharge date, you will have "aged" your credit cards, and have saved some money toward a larger down payment. It makes no sense to add mortgage payments to add to your student loan payments. You can't defer them forever, and right now that is much more important than getting a house!

[Flamingo]

To the OP - please also note that a BK on your credit reports is the worst thing that can be on a credit report next to foreclosure and repossession. Having two out of three or all three is the bottom of the barrel. That BK on your reports prevents a lot as most people don't want to realize and some creditors will not even consider lending to anyone with a BK. Time is everyone's friend after discharge. Some can recover more quickly than others and some, as in your instance, may take longer and with the issue of unemployment, you need to take a different view of your situation since the unemployment is going to prevent you even trying to obtain loans or other credit. If you apply for too much credit, that also works against you with all the hard inquiries (they stay on your credit reports for two years).

[Logan]

Hi Jojuvan,

The problem with your score may be lack of a larger credit limit. Also, check to make sure the credit cards are reporting the limit instead of high balance, and that there isn't more than 30% owed on any one card. Inquiries DO hurt your score, as they age beyond 90 days, 120, etc...the inquiries are less damaging. So yes, keep inquiries down and your score should improve. Finally, here is the deal with your Husband and being unemployed. First, Unemployment does not count as income so you will have to do one of two things; either qualify for all debt including the house payments on your own, or wait until your DH finds a job. In order to use income from a new job it will have to be in a similar line of work, can't be commission income (you would need a two year history) and he must not be on probation.

One more thing, there can be a large difference between different score models. Lenders will generally use the middle of 3 for this reason. It's not unusual to see a fico of 609 with a beacon of 680 or vice-versa. If you look next to your score you will see numbers or codes that give the reasons for the score. Normally they will say something like balances too high to the amount of available credit; serious delinquency or derogatory items in file; length of credit history, etc.

Not talked about much here but low credit lines can hurt your score. It's easier to be responsible for a $500 limit than a 5K limit and that is taken into account.

Also, just a hunch but you're student loans certainly aren't doing you any good since you're not paying them I would bet that they may actually be dragging you guys down. If I were you I wouldn't worry about your credit score right now and concentrate on getting your husband a job since a lender is going to want to see him employed for a bit before they would most likely approve you for a loan if his income is needed. In fact, once your husband gets a job I would call a lender such as quicken loans or a local mortgage broker and have them run your credit and take your info to find out what your hurdles are to qualify for a loan.

Logan

[IBroke]

Not talked about much here but low credit lines can hurt your score. It's easier to be responsible for a $500 limit than a 5K limit and that is taken into account.

Wrong!

The CL might be considered under a manual credit-review - but it has absolutely no affect on your FICO-score.

FICO considers utilization in % - NOT the amount of available credit in $$. Having a $5-Balance on a CC with a CL of $500 (1%) gets you the IDENTICAL Fico score compared to someone with a $500-Balance on a CC with a CL of $50,000 (also 1%).

There are some FAKO-scores that consider the amount - but those are just what they are - wortless FAKOs. The real FICO-model doesn't.

[Logan]

Wrong!

The CL might be considered under a manual credit-review - but it has absolutely no affect on your FICO-score.

FICO considers utilization in % - NOT the amount of available credit in $$. Having a $5-Balance on a CC with a CL of $500 (1%) gets you the IDENTICAL Fico score compared to someone with a $500-Balance on a CC with a CL of $50,000 (also 1%).

There are some FAKO-scores that consider the amount - but those are just what they are - wortless FAKOs. The real FICO-model doesn't.

I guess I'm wrong according to IBroke.

What factors determine my credit score?

The exact formula of the FICO and other scoring models is a trade secret. However, Fair Isaac has identified five factors and the importance given to each factor. Other scoring models include most of the same factors. However, the weight given to individual factors may vary.

The five are (https://www.myfico.com/CreditEducati...urScore.aspx):

Payment history - 35%
Amounts owed - 30%
Length of credit history - 15%
New credit - 10%
Types of credit used - 10%

It's clear that the single most important factor is your record of paying your bills on time. The number of delinquent accounts and the length of time the account went unpaid also factor into the calculation. Your payment history may also include financial problems that have ended up in court such as bankruptcy or judgments entered against you.

[tobee43]

i know for many...especially, many in their "prime" time it's so important to think about your credit and how it's going to effect you in the future....

of course, you think about buying a home, car....but there are ways around the banks..and if bk doesn't teach you anything...it should have at the least showed you how to "save" and live within your means.....

personally.......i say enough ...i'm not letting any credit reporting company nor bank dictate my future.........we went AROUND the banks and the credit bureaus ...AND when we need a car...i look in my bank account and see what's available and buy what i can to get there and back....i don't need the BMW anymore.

we just closed on our NEW home.....owner finaced...no closing cost to the banks.......5% straight 15 year mortgage....end of story....no PMI...no fees.....no rip offs.

and yes, we also got credit cards......good lines......2000k.....from cap one...2 others.....1500k and 1300k...........and have STOPPED using them completely.......and i don't care....time i believe is the key here...

and lets not forget....there have now been millions of bk's........so it's much more common than it was 10 years ago.....and after the law changes with bk's in 2005...designed to discourage filings.....many of us had to just say.....sorry...banks..we know you don't like it, but you left us to choices...i just believe if this economy is going anywhere in the near future.....someone....(THE BANKS)....are going to have to begin over looking bk's, repos., etc., on credit reports or they simply will have no one to sell anything too!!!!!!! now, i'm not saying there is no one to sell to....but those that have not been effected by this financial crisis...well, those people are never touched anyway...they are called "mostly" the RICH....not to say some that are not "rich", haven't been alright during this mess...however, frankly, i have met NO ONE that has not been effected in one way or another as a result of this downturn.....

i for one will NEVER ever if possible use any bank for anything again.......but then again we are a bit older and we can turn our noses up now...but i know there are still many that cannot..

[Exployer1234]

Sometimes if you have too much available credit that is in use it can lower your score. If you have an 11K loan on a car, and 2 credit cards carrying balances it looks like you have used all of the credit at the same time. Plus you are carrying student loan debt. My thoughts are start paying the car loan down. Keep a very low balance on your credit cards, and start paying off the student loan debt. If you try to buy a house at the 2 year mark your mortgage broker will probably say the same thing: Pay off some of the debt before applying for a home loan.

[tobee43]

Sometimes if you have too much available credit that is in use it can lower your score. If you have an 11K loan on a car, and 2 credit cards carrying balances it looks like you have used all of the credit at the same time. Plus you are carrying student loan debt. My thoughts are start paying the car loan down. Keep a very low balance on your credit cards, and start paying off the student loan debt. If you try to buy a house at the 2 year mark your mortgage broker will probably say the same thing: Pay off some of the debt before applying for a home loan.

that's what gets me to no end with these people whom determine our worth.......too little....no good.......too much credit...naaaaaaa....too young.....shame on you........too old......die already so we can collect from your estate......LOL!! that's why i'm going to make certain our "estate" planning...(what estate???) with have a balance of ZERO!

[LSUTiger32]

Yeah defintely check your reports. I've been discharged for 18 months now and my score is nearing 700 FICO (from myfico.com). I haven't so much as looked at a credit card application, so the notion that those trash $500 limit credit cards are going to help are just silly. Check your reports and be patient......things will get better. Unless your score was very low before you filed I would suspect there are some accounts that are not reporting correctly.

[Exployer1234]

that's what gets me to no end with these people whom determine our worth.......too little....no good.......too much credit...naaaaaaa....too young.....shame on you........too old......die already so we can collect from your estate......LOL!! that's why i'm going to make certain our "estate" planning...(what estate???) with have a balance of ZERO!

I agree! Basically the old saying Da*n if you do and Da*n if you don't.

[tobee43]

I agree! Basically the old saying Da*n if you do and Da*n if you don't.

yes, i truly believe that's the REAL BOTTOM line with getting your credit back....

and i think the sooner we begin to realize it's not just our scores......it's the banks will give NO one any money....

i was talking to our accountant this week...he says he knows of only ONE person that got a mortgage within the PAST 36 MONTHS!!!!!! and these people put 50% down payment on a house, had over 800 FICO score........had to climb mountains and swim oceans.........that should say it all!!!!!!

[Hope2File]

We are only 1 year post discharge and our scores are a bit lower than yours. We recently met with a mortgage (FHA) lender just to see what we need to do. We were pretty surprised by the stuff showing up on our CR. Collections still showing balances, an old car loan still showing balance owed and monthly payment of $500. I could go on but you get the idea. I have done the 'free credit report' thing but for some reason never noticed this stuff until someone else pointed it out.

One thing he did mention was that our 'small limit' credit lines were important, and that we were doing everything right - just need to keep the balances less than 50% and get the inaccurate items taken care of. I also have a large student loan that is in deferment. Oh - one more thing the lender said would help our cause when we go for a mortgage in a year will be the fact that we have a 3 year rental history @ $900/month. So make sure you're keeping the paper trail from your current housing payment.