Things That Make Me Laugh

I pulled my credit reports and scores this week to do my annual check. My FICO score is about the same as it was last year, not great at 635, but at least it has not gone down. I had hoped it would go up a bit more, like at least to 650. My Advantage score is 785, what ever that means and supposedly am a Prime candidate, what ever that means. I'm getting ready to process an application for an FHA loan to get some money for some much needed work on my house. I thought this would be a good time to double check my file before it gets pulled by a lender so I can clean up any discrepancies.

I did have to laugh at a couple items that were listed on the report as an "explanation" for my low scores.

• Your report shows one or more bankruptcy filings. Bankruptcies can remain on file for up to 10 years, depending on the chapter filed, and have a negative impact on your credit score. Ah Duh, I filed Bankruptcy, I expect to find this on the report!


• The average loan amount across open, recently reported real estate accounts, such as a mortgage, is too low. Having low loan amounts has a negative impact on your credit score. Too Low? I mean my mortgage was small to begin with, I did not buy a McMansion!

I did find one discrepancy, which was an account I had in collections was discharged in the BK filing. It is still listed as active in two of the three credit agencies and not on the third. I'm filing a paper dispute as I hear they work better than an electronic one. I have no idea if this is true or not, but I thought, hey, it's only two stamps. I even cleaned up some personal information, employers names spelled wrong, corrected some start dates, eliminated some old duplicate mailing addresses.

I've said this before. Even with the Bankruptcy, it's better to have correct negative information than incorrect negative information on the account.

When was the last time you looked at your credit reports?

You Got The Discharge-Now What?

This is the next installment of my long overdue series on Bouncing Back From Bankruptcy.  As always, please consult with your own financial experts and resources when it comes to dealing with and managing your money! The following is my personal experience. 

I am now 15 months post Chapter 7 Bankruptcy Discharge and on my way to Bouncing Back From Bankruptcy.  I had my 341 Trustee/Creditors meeting in October 2007 and got my discharge just over 3 months later.  Hopefully, your 341 Trustee/Creditors meeting goes along uneventfully.  What happens after that? Hopefully you get your discharge.  My discharge papers came in the mail one day, just a one page form from the Bankruptcy court that gave my name, my case number and said I was discharged.  I almost missed the envelope in and amongst the junk mail. 

Actually, I started getting offers of new credit even before my discharge letter arrived in the mail.  For me, actually getting the discharge letter was a bit anti-climatic.  I had been struggling with the whole filing-delays on my part, delays on getting a CMA of the house, delays dealing with my attorney, delays dealing with information the trustee wanted.  I was probably the exception and not the norm in filing for a bankruptcy. Maybe it is the norm?  You guys tell me. 

Anyway, the best bit of advice I can give you as soon as you receive your discharge papers are to do the following:

1) File away for BK petition in a safe place.  There is no reason on God's green earth that anyone needs to see that pile of papers again.  Keep it for safe keeping, but file it away. If you need a copy, your attorney will probably charge you something like 75c to $1 per page to get you a copy. 

2) Take that discharge letter and make about 5 copies, file the original one away.  Why make copies? You may need the official court letter at some point for something. Might need it, might not.

3) Get a copy of your credit report 4-6 weeks after you get your discharge letter and make sure that the BK filing is noted.  As I always say, I may have negative information on my report, but at least I want that negative information to be correct. AND you want to make sure that all your debts included in the C7 or C13 are correctly noted. 

4) Get a folder for all those credit offers that come in, put those offers in the folder and DO NOTHING with them. Remember patience is a virtue!

5) Thank the spiritual entity of your choice for getting your discharge and allowing you to move on and bounce back.  

6) Find some time to reflect on your BK filing and make a plan for your own bouncing back and moving forward. 

When you file for Bankruptcy, more than likely your credit score has taken a big hit from the late payments, accounts in collections, loans in default, you know, the nasty things.  In America, one way to improve your credit score is to establish credit and be on time with your bills.   This puts most post BK folks at a bit of a disadvantage.  We are bankrupt and can't get credit, but we need credit to improve the FICO score to be able to get credit.   So why am I telling you to put those credit offers in a folder?

Simply, most of them are going to try and offer you credit at an outrageous interest rate.  I can remember getting letters from finance managers at several car dealerships, some of the dealerships were well known in my area and some were from those sort of seedy looking corner lot used car lots, You know the type, the cars look flashy, lots of flags and signs that say "We Finance Anyone" and probably crap cars.  The one company that persistently sent me an application for a credit card also had (to me and others) insane fees and charges.  For the privilege of getting a $500 credit card, this particular bank was going to charge about $229 in assorted fees just to "activate" the card that was at a 19.9% rate as well as charge of $7.50 per month fee to have the card.   

I had two goals last year. One was to get a credit card again and one was to get a car loan.  I ended up with the car loan first, only because my old car really needed to go.  It has over 232,000 miles on it and needed a lot of work, again for the third or fourth time.  I pulled from my file, those letters from the finance managers of those car dealerships.  I had about 10 different "offers of credit".  I did my homework on both  of the type of vehicle I wanted and the dealerships themselves.  

Some of the finance offers were eye opening to say the least.  23% interest rates, loans available only on select makes and models, offers only good up to a set price.  Needless to say, these types offers seemed shady.  I did get a letter from the finance manager of a local dealership that had a good reputation. I called the finance manager and set up an appointment.  Doing my homework paid off.  This particular dealership had a vehicle I wanted with all I wanted (plus a couple extras), I went into the meeting with the finance manager well prepared. I had my budget, I had done my homework on the two vehicles I was willing to look at on their lot and I had some cash to put down on the car.

What worked in my favor was that I was organized when I came in to meet with the finance manager.  I also had on my credit history, a paid off car loan with a major bank. I did not have a repossession on my account.  I drove out of the dealership a few days later with my new to me car and have faithfully paid that loan three days early every month.  I am now going to pray to my spiritual entity of choice and hope that I can refinance the Escape at my credit union. I'm hoping I can make it into the single digits. 

Getting a credit card took a little longer.  For starters, I was not going to "accept" that invitation I mentioned above. I knew out there, there had to be a better offer for me.  There are two choices when it comes to credit cards after Bankruptcy.  The secured credit card and the unsecured credit card.

A secured credit card is not a pre-paid credit/gift card. It is a credit card issued by a bank.  This type of card requires that you put a specific sum of money into an account at that cards bank.  This is your collateral so to speak.  You then get a credit card with a balance that equals the savings account.  You can click here to read on Bankrate.com about secured credit cards. Bank of America, Wells Fargo, Citibank all offer secured credit cards.  I also encourage you to check with your local bank and credit union, they may also offer a secured card. Many times after about a  year or so of good credit card management, the secured card may be re-issued as an unsecured card.  Each banks policies are different.  

I waited 10 months before I took the plunge and applied for a credit card. I applied for and got a credit card with a $500 limit, 14.99 % interest rate and a yearly fee of $39.  Folks I was thrilled with the whole deal!  I also made sure that the card I was applying for reported to all three credit agencies.  I want my positive re-payment status to be reflected, remember this is the new and improved Betty here.  

There are several banks that issue credit cards to folks with less than perfect credit. One of those banks is the one many PF bloggers love to hate, you know, the What's in Your Wallet Bank.  I'm going to go out on a limb and say that if you had a credit card with that bank or one of the others, it may be more difficult for you to get an unsecured card with that bank even at a lower limit.  I honestly don't know, but my gut tells me that if that bank was part of your BK filing they would probably be less likely to grant you an unsecured card.  No matter which type of card you get, make sure that they report to the major credit bureaus. It will do you no good to have a card that does not report.  You want the positives to start hitting your credit report. And ALWAYS READ THE FINE PRINT AND THE TERMS AND CONDITIONS. 

The purpose of getting credit is not to run it up again and to carry.  It's to help you establish a better credit score.  I am perfectly happy with my $500 limit credit card. I use it for things like gas, pet food, and the other odd personal purchase. I also log on to my account every two weeks and either pay in full or pay a chunk down on the card.  The highest balance I've had in the past 5 months is now, I have about $200 that will be paid next week which reflects the last of my vacation spending and some car maintenance.  I get paid from my weekend job next week and will pay the balance in full. 

More so than anything else last year, getting that $500 limit unsecured credit card was such an ego booster. It showed me that I was truly bouncing back.  

I think it's also important post discharge to really look at what got you into the BK in the first place.  We all have our stories for filing for Bankruptcy.  As I've posted before, I had a string of really bad fiscal luck, I could not get out of my own way and I fully admit I also made some less than stellar money decisions which just added fuel to the fiscal fire.  My next post in this Bankruptcy Series will be on the importance of "soul searching" and "coming to grips" with the BK filing now that you have filed the bankruptcy and are discharged.  

Have a lovely weekend y'all.

Scores!

Seems the three major credit bureaus are going to make it dammed near impossible for the average consumer to get their FICO score. Single Ma at Fabulous Financials reported the other day that Experian was not going to allow consumers to purchase their own score. You can click here to read her post.   There was also an article in the New York Times On Line about the same, you can click here to read that article.

I decided to hop on it and got copies of my credit report and I paid for the scores as well before my chance to get the Experian score went bye-bye.

Hum.... Experian is already using a formula called Vantage Score to give consumers a credit score.  I had hoped to get my Fico score from Experian, but no go. I got a FICO score from Equifax, Transunion I think gave me a Vantage Score as well. I'm going to log back into TransUnion and double check that. I can re-view that report for up to 30 days.

Last year I pulled two of my three credit reports to check the information on them. I may have filed bankruptcy, but even the bad and negative information should be correct information.  If you are post BK and your attorney has not pulled your report, I strongly recommend you pull the reports and make sure all your debt information is correct. 

My scores ended up being

Equifax: 660 (old Fico System)
Transunion: 733 (not clear, probably new Vantage System)
Experian: 758 (new Vantage System)

My FICO score last year from Equifax was 638 or 658 from Transunion was 651. A bit of an improvement, but not tons.  I had hoped that with my prompt payment on my car loan, new to me credit card, mortgage and student loan that I might eek up to the 670's.  I still have a ton of negative information on the reports from the  BK as well as the BK.

I don't know what my score was pre the Bankruptcy, probably down in the low 500's-yikes.  I'll probably pay for the scores again in the fall.

What's Up T-Mobile

I have T- Mobile as my mobile phone carrier. I'm fairly happy with the service, I get better coverage outside of my immediate geographic area, not so great in my immediate area, but I can cope with it. When I switched carriers a few years ago, T-Mobile "accepted" my old plan at the old rate, which was just fine by me, it's low and I hardly ever use up my minutes.

When my young dog decided to use my old phone as a chew toy a few months ago, I upgraded to a spiffy Motorola phone. T-Mobile did not send a battery with the phone to me. They did however, credit me the cost of the phone since I went out and had to buy my own battery-thus I got my nice upgraded phone for free!

BUT and there is always a BUT. Why is T-Mobile checking my credit report every other month. When I pulled my credit report and scores last week, I looked at the section that lists who has peeked at my report. The bank that holds my mortgage checks a couple times a year (and has done so on a regular basis), there was the bank that I got the car loan from (just the one time), but T-Mobile has checked the report 5 times in the past 7 months.

Things that make you go hum. I've had one payment in the past 3 years that was not auto debited and that was last July. I transferred my auto pay bank information too late in the month. T-Mobile customer service said they would just double bill me the next month and I said fine.

Sooo why the repeated checks on the credit report? What's up T- Mobile?

And the Score is...

651 from Trans Union.

At least I have a baseline to go forward on.

One thing off my To Do list.

Checking the Credit Reports

As part of my bankruptcy, I have been checking my credit reports to at least make sure the information contained in them is correct. As I've said before, it may not be perfect, but it needs to be correct.

I will this week, pull my last credit report. I've pulled from two of the three reporting agencies, now it is time to do the last one. This time I'm also going to get my FICO score. I can't remember the last time I got a FICO score, so I'm curious to see what it is now that I'm post BK and have a new installment loan for the car. I've been making my student loan and mortgage payments early for the past year, so I'm hoping the score is not totally dismal.

I really should have pulled the score with the first credit report, but I am such a chicken I did not. Time to put those fears aside and find out what the score is. I will keep you informed!

Question for You All

Question for you all who may be more up to date on this stuff. How long does out of date personal information stay on your credit report?

When I pulled my report last week I noticed it had mailing addresses for me that had to be a good 10 years plus old. I can't even remember the last time I used my parents old home address for any type of a bill. I left home during college and never went back. No one in my family has lived at that address for close to 10 years if not more. I'd like to get rid of the old outdated information ASAP.

I think I'll pull the second report next week and see what that one says.