Posted on: 02nd Nov, 2009 03:45 pm
We are filing chapter 7 (credit cards and medical) and are keeping our home. We have lived here twenty years and have never missed a payment. We financed a new van in 1999 and made all 60 payments on time. Will our mortgage help our credit score over time as we do not want to have even one credit card?
No mortgage lates will indeed assist with maintaining a higher FICO score, but I strongly encourage you to get two credit cards after your bankruptcy has been discharged, and make regular payments. It's really important for two reasons. Firstly, because it'll boost your FICO score, and secondly, because Underwriters want to see reestablished credit, paid on-time and as agreed, after a bankruptcy.
You'll probably have to start with unsecured cards, but convert them to secured as soon as you're able (ask your creditor if you can convert them after 12 months of on-time payments). This part is really important (getting the credit cards and making regular payments).
When I did my chapter 20 (chapter 7 immediately followed by chapter 13), my FICO score was 685 when I was in my 25th month of the chapter 13, and it's because I didn't miss any mortgage payments, and reestablished my credit with two credit cards. All you're going to have is a chapter 7, so you can do it too.
You'll probably have to start with unsecured cards, but convert them to secured as soon as you're able (ask your creditor if you can convert them after 12 months of on-time payments). This part is really important (getting the credit cards and making regular payments).
When I did my chapter 20 (chapter 7 immediately followed by chapter 13), my FICO score was 685 when I was in my 25th month of the chapter 13, and it's because I didn't miss any mortgage payments, and reestablished my credit with two credit cards. All you're going to have is a chapter 7, so you can do it too.
Hi flags,
Richard has given you some great advice. I agree with him about the credit cards. My boyfriend filed bankruptcy & immediately after his discharge, I added him as an authorized user on one of my credit cards because I have good credit accounts with all of my credit cards.
He signed up for a firstpremier secured credit card. They immediately add like $200 for their fees & such, but it has been helping his credit because he has a good payment history with them.
He's out of town right now, but when he comes back home I will be discussing the options of a few unsecured credit cards with him. The first one is the alliedtrustdiamond.com card It is a $10,000 unsecured credit card. You just buy something from them, make the payments & watch your credit score go up. The other one can be found by googling USA shoppers card. They offer a $12,500 unsecured credit card. Just buy something from them & make the payments. This shows that you have good payment history with both &also that you have high credit limits with low balances. Come to think of it maybe I should sign up with them to boost my credit score!?
Anyways, I hope this has helped you out. I knw that once his credit score is up again, we will be able to get our real estate investing business rolling. :) Good luck!
Richard has given you some great advice. I agree with him about the credit cards. My boyfriend filed bankruptcy & immediately after his discharge, I added him as an authorized user on one of my credit cards because I have good credit accounts with all of my credit cards.
He signed up for a firstpremier secured credit card. They immediately add like $200 for their fees & such, but it has been helping his credit because he has a good payment history with them.
He's out of town right now, but when he comes back home I will be discussing the options of a few unsecured credit cards with him. The first one is the alliedtrustdiamond.com card It is a $10,000 unsecured credit card. You just buy something from them, make the payments & watch your credit score go up. The other one can be found by googling USA shoppers card. They offer a $12,500 unsecured credit card. Just buy something from them & make the payments. This shows that you have good payment history with both &also that you have high credit limits with low balances. Come to think of it maybe I should sign up with them to boost my credit score!?
Anyways, I hope this has helped you out. I knw that once his credit score is up again, we will be able to get our real estate investing business rolling. :) Good luck!
DO NOT use first premier for a secured card. they are a ripoff - witness the "like $200" charged immediately noted above. there are banks and credit unions that will offer secured cards and not do such heinous acts. go to them!
i also have to be very skeptical about "alliedtrustdiamond.com" and "usa shoppers card" as noted above. look at those credit limits! those are so high as to be impossible as well as unbelievable - especially if you're a bankrupt. start small and build that way...your mortgage will definitely help you rebuild credit.
i also have to be very skeptical about "alliedtrustdiamond.com" and "usa shoppers card" as noted above. look at those credit limits! those are so high as to be impossible as well as unbelievable - especially if you're a bankrupt. start small and build that way...your mortgage will definitely help you rebuild credit.
