Credit score drop just before BK

[FloridaGuy]

For anyone wondering about credit scores, here's what happened to us. Everyone will be different, based on credit history, payment history, etc. but here's what we had happen:

Both my spouse and I have had excellent credit, over 18 years history on us both, with credit cards from the late 80's. We have NEVER had a late payment in our history.

About 2006 my score was about 790 prior to a bunch of CC debt from a business we started. Wifes was about 710. We actually got a couple credit cards in her name through the business, and her score went up slightly in 2007.

My scores started dropping. By august 2007, my score with a BUNCH of CC Debt (About 90% of my credit limits) dropped to around 680. They have been between 665 - 690 the past 12 months based on average balances I assume. In October 2007 we refinanced the house, and the mortgage went from a joint loan to my wifes name only. (She had better credit scores, and countrywide got us a lower rate by using her name only... although the house payment was much more than her annual income!) Her score went up a little to about 740! Her score has been stable the last year between 720 - 735.

Fast forward to july/aug of this year of this year, with the BK looking as an option, on the advise you always see on the board and from our lawyer, we stopped making payments. I was hoping we could file the BK before the reporting agencies caught up and showed late payments, but NOPE.

Just on Thursday, I saw my score drop from 688 to 623 by CHASE reporting two seperate cards 30 days late. On my wifes score, Countrywide reported both loan & equity as 30 days late. Here score went from 728 to 628 in one swoop!

I have been using the equifax score watch for the last couple years, and like it as you get e-mail notifications on alerts you can set up. (For example a dollar or percentage increase in CC balances) or several other changes in your score. They also have a 3 in 1 credit report monitoring service as well. I have not been using that, but may subscribe on a monthly basis, just to monitor to see what happens during the BK. You can also call them (as opposed to signing up online) and can generally get a discounted rate if you pre-pay for the year. (Usually about $50.00 off)

Can't wait to see what happens after we file.

[ready2puke]

I was so proud to have a 800 score, but what the heck did it get me? More offers more debt. Im sure my score has dropped like a rock since Im 60 days on 8 cards right now...Oh well we all live thru it and so will you and so will I..we are the same people as before..but it is interesting how fast it drops. Its called gravitiy...lol

[RedLight]

DW and I were both in the low 700's and after only two late payments showing and the BK on the report, my scores are sitting at 540. I can't believe it. Our 341 meeting was last Monday and two CC's and our mortgage is still showing the balance so we hope that after those show zero balance and IIB, the scores will go up. I sure hope so...

[Keebler]

My wife and I had excellent credit for years. A coupple of years back we were in the low 700's and got turned down for an auto loan for the first time ever due our debt to income ratio. That's when we began to realize that our financial choices were sinking us.

We tried to make better choices and turn things around but it was clearly going to be difficult and very long term. Around that time a new kid was born and my wife got sick. We ended up spending a couple of years trying to figure out what was wrong with her and whether she'd live or die. In 2006 our medical expenses were huge and we couldn't keep up with everything and decided that bankruptcy was unavoidable. We stopped paying unsecured credit and focused on living on our paycheck without using credit of any sort.

For all of 2007 we kept our mortgage and utilities current and struggled to keep up with medical expenses by ignoring credit cards completely. (To put it in perspective, our direct medical expenses in 2007 was just over 25% of our gross income!) We paid our automobile loans so we wouldn't lose them and managed to make it well in to 2008 before we put the bulk of medical expenses behind us and filed Chapter 7.

Now that we've filed, we're surrendering the most expensive vehcile and probably won't reaffirm the cheap one. We've decided to be debt-free and payment free with the exception of our mortgage.

You can see from my signature the effect it had on our credit scores.