How to clean up my credit

[mattfl]

Just had my 341 meeting about 2 weeks ago now. Originally filed BK due to divorce and not being able to make house payments after divorce and everything started piling up. So here's my situation now.

I make a good salary and have been at my current job for 2+ years.

Chapter 7 BK has been filed and I'm in the 60 day waiting game.

House payments are about 1 1/2 years behind, I decided a while back that since BoA won't work with me(along with my ex wife not wanting to work with me) that I'm giving up the house. I'm in Florida and from what I've heard the courts are way way behind in foreclosures in this state and I plan on staying here until they kick me out at which time I'll be moving in with my g/f. As far as the court knows I'm currently working with BoA to keep the house as my paperwork for the filing shows me keeping it.

Car payment is current and I'm not surrendering it(needed the monthly payment figured in to be eligible for a CH 7). I'm current on payments on the car, have about 2 1/2 years left on the current loan.

Besides monthly bills, power/water/ins/cable the car is my only other bill so my available "extra" income is pretty high.

What's the best way to start rebuilding my credit, I know the house being that far late is gonna be a pretty big knock, but what about my car. Does keeping my current car and staying on time with the payments help show positives or should I try and trade it in and establish a new credit line and start showing good monthly payments. I've also heard to try and get a secured credit card as soon as possible as that will show positive credit as well. Thanks for all your help!

[jacko]

What would you need the credit for?

[mattfl]

What would you need the credit for?

Shouldn't I start rebuilding my credit to get my score back up?

[DaisysMom]

When I was talking to my attorney while waiting for my turn for my 341 hearing, I told him I never wanted another credit card. He then told me I should have one. A card with a low credit limit to use when traveling, for emergencies, etc. He said just having the one and keeping it paid off would be a good way to start rebuilding my credit rating.

When I got home, I discussed it with my husband and we agreed he was correct. My Hubs family is 3000 miles away and it is easier to travel, book flights and hotels when you have plastic.

So after we get our discharge, we are going to shop around and get ONE low limit card (probably a secured one) and just be "smart" this time. We have learned our lesson.

DM

[mattfl]

When I was talking to my attorney while waiting for my turn for my 341 hearing, I told him I never wanted another credit card. He then told me I should have one. A card with a low credit limit to use when traveling, for emergencies, etc. He said just having the one and keeping it paid off would be a good way to start rebuilding my credit rating.

When I got home, I discussed it with my husband and we agreed he was correct. My Hubs family is 3000 miles away and it is easier to travel, book flights and hotels when you have plastic.

So after we get our discharge, we are going to shop around and get ONE low limit card (probably a secured one) and just be "smart" this time. We have learned our lesson.

DM

Oh I have absolutely learned my lesson about CC's. But having one around for emergencies and emergencies only isn't the worst idea in the world.

[LadyInTheRed]

mattfl, it's a little premature to start trying to repair or rebuild your credit. Wait until about 60 days after your discharge. Then get copies of your credit reports and dispute anything that is not reporting correctly. Once any errors have been fixed, apply for a secured card to start rebuilding your credit. Not all banks will approve secured cards for people who filed BK. So, do some research before applying.

The car loan probably will not keep reporting after discharge. Some who have continued to pay on discharged car loans have reported the lender reporting on time payments. But, that seems to be the exception. Refinancing that loan or getting a loan on a different car and making timely payments will help your credit report. But, don't get yourself into a high interest loan or one that you have to struggle to pay. Your credit score will improve in time and you will be able to get decent loan terms in a year or two. It's not worth spending too much on a car loan to rebuild your credit rating.