Credit Scores

[crookedoak]

I am awaiting discharge, attorney says by law needs to be no later than June 4th, and have been checking credit monthly for past 3 years.

I started out in the low 500's across the three, and now have average score of 643, with highest at 681.

I checked my FICO yesterday and was given a 661 by Experian.

Once officially discharged how much of a jump can I expect, if any?
I am hoping to purchase my house by February 2010.

[Flamingo]

Things will not happen overnight after your discharge. Time is your friend when it comes to credit after BK. To give you some idea as to us and we have been pristine with credit after discharge:

April 2006 at early refinancing for buy out prior to discharge in 8/06 - scores in the 670's
April 2009 - 3 years later - scores fluctuate between 760's and 790's. Our BK comes off our credit reports this month so we will see what happens then.

Make all payments of everything on time and keep credit card balances below 1/3 of your credit limit. Always make more than the minimum payments and pay off balances in full each month if possible or keep a low running balance withi payment more than the minimum payment each month. All that will help you to increase your scores but with the BK on your records, it will be gradual....

[crookedoak]

believe me that is exactly what I follow. The only that ever surfaced on my report was a collections for 35 ER fee that has been removed.

Everything is paid on time always.

It seems what hurts me most is accounts included in 13 that show as delinquent or with original balances

[StartingOver08]

believe me that is exactly what I follow. The only that ever surfaced on my report was a collections for 35 ER fee that has been removed.

Everything is paid on time always.

It seems what hurts me most is accounts included in 13 that show as delinquent or with original balances

Correct those items in your report. They are suppose to read iib and zero balance. The creditors will not correct on their own. Send a letter to the CRA's first and if they do not correct send to the OC's to correct. Send CMRRR.

[optimistic1]

I am hoping to purchase my house by February 2010.

If you wait long enough, and you qualify, get yourself an FHA loan. Your credit score means nothing to FHA. But after your discharge, you would need to re-establish your credit, which after your discharge, you will lots of offers from more slum creditors.

Keep in mind, that the down payment assistance programs have been a little screwed up because of a new law that Bush passed. But if you check with your local housing authority, they have grant programs to help you out with some free cash, although it does come with some strings attached.

Good luck to you.

Here is some info


The following is a list of items concerning the borrower's credit:

NO CREDIT HISTORY
Two lines of credit are necessary to apply for an FHA loan. However, in the event a borrower does not have sufficient credit on their credit report the FHA will allow substitute forms.

CHAPTER 13 BANKRUPTCY
FHA will consider appoving a borrower who is still paying on a Chapter 13 Bankruptcy if those payments have been satisfactorily made and verified for a period of one year. The court trustee's written approval will also be needed in order to proceed with the loan. The borrower will have to give a full explanation of the bankruptcy with the loan application and must also have re-established good credit, qualify financially and have good job stability.

CHAPTER 7 BANKRUPTCY
At least two years must have elapsed since the discharge date of the borrower and / or spouse's Chapter 7 or 13 Bankruptcy, according to FHA guidelines. This is not to be confused with the bankruptcy filing date. A full explanation will be required with the loan application. In order to qualify for an FHA loan, the borrower must qualify financially, have re-established good credit, and have a stable job.

LATE PAYMENTS
During an underwriter analysis of borrower credit, the overall pattern of credit behavior is being reviewed rather than isolated cases of slow payments. If a good payment pattern has been maintained, regardless of a specific perod of financial difficulty preceded it, the borrower may escape disqualification.

FORECLOSURE
FHA insured mortgages are generally not available to borrowers whose property was foreclosed on or given a deed-in-lieu of foreclosure within the previous three years. However, if the foreclosure of the borrower's main residence was the result of extenuating circumstances, an exception may be granted if they have since established good credit. This does not include the inability to sell a home when transferring from one area to another.

COLLECTIONS, JUDGEMENTS AND FEDERAL DEBTS
A collection is minor in nature usually does not need to be paid off as a condition for loan approval. It is stated as such in FHA guidelines. Any judgments will have to be paid in full prior to closing. Borrowers who are delinquent on any federal debt, such as tax liens, student loans, etc., are not eligible.

[Flamingo]

believe me that is exactly what I follow. The only that ever surfaced on my report was a collections for 35 ER fee that has been removed.

Everything is paid on time always.

It seems what hurts me most is accounts included in 13 that show as delinquent or with original balances

As StartingOver stated, you can dispute those and get corrected. Accounts listed in Chapter 13 should be zero balance and indicate that the account in included in a Chapter 13 Plan or Wage Earner's Plan. However, if you had late payments or charge-offs prior to filing BK, that information will remain.

[ansky0007]

There should be NO change from your Chapter 7 filing before and after discharge. The discharge does not change anything.

[or30313]

Crookedoke,

I am nearly in the same boat as you with nearly the same credit scores at the three CRAs. I too filed at the last minute before the law changed in October 2005. I was just discharged a few weeks ago after paying off my Chapter 13 18 months early.

The CRAs had updated my Chapter 13 status from "Filed" to "Discharged" within 24 hours of my actual discharge date. I was amazed how fast it hit them.

However, my scores didn't change at all.

I've read elsewhere that people have seen an increase, but I suspect that this has more to do with the aging of the bankruptcy rather then the change from filed status to discharged status. My scores have jumped each time on the 1-year, 2-year, and 3-year anniversaries of my file date. I hope that it jumps again when I hit my 4-year anniversary.

I think we'll both see a decent 10 to 20 point jump in October.

[DUMBAGAIN]

So for getting a house with an FHA loan, I would assume the "explanation" of the chapter 13" --just getting yourself over extended would not fly??

[optimistic1]

I dont see their point in that case, because, how exactly are you to re-establish your credit, when in fact you shouldnt be taking on any new debt during the plan? I would just wait until you 13 is discharged and work that point.