After my bankruptcy, I tried fixing some errors in the credit reports, hoping to raise my score. After all – since my Chapter 7 bankruptcy was discharged, all my debts were now zeroed out, but not so on my credit report. So I logged into each of the three major credit service bureaus’s web sites, and submitted my dispute letter electronically. The responses came back a month later -  everything looked fine to them! Then I got the “Attorney’s Credit Repair Guide” and tried one thing.  I boosted my FICO score to 642 — up over 70 points! I am now at 24% percentile (stilll below average), but a home mortage at 5.720% would be possible now.

FICO Credit Score Improved After Bankrupcty

So what one thing did I do? More on Improved Credit Score After Bankruptcy

You visited a few times and I would appreciate your thoughts on this post, why not comment?

Technorati Tags: credit after bankruptcy, credit score, FICO

Have you been wondering what happens to your credit score after bankruptcy?

Well, for some time before our bankruptcy, our scores (mine and my wife’s) were in the mid-600s. We both continued to get credit card offers until we were late with payments.

Since I filed for Chapter 7 in August 2008, it tanked. I am not sure how much exactly, but here is the current score (drum roll please …):

570 – I at at the 9th percentile of credit scores. Whoo-hoo! I am better than 9% of U.S. consumers, and I just got my chapter 7 discharge!

FICO Score in March 2009

Here is what MyFICO.com says about my score:

Your score of 570 is well below the average score of U.S. consumers. Most lenders consider this score an indication that you are a risky borrower. Based on your score alone, you might expect the following:

• While the types of credit available to you may be somewhat limited, some lenders may approve your loan application, but possibly with higher interest rates and/or with more restrictive terms.
• Lenders may require additional information to help them evaluate your application for credit – factors such as your income or time at job may be reviewed.
• You may be requested to provide an upfront down payment or security on the loan before approval

On the poor to excellent continuum, I am just a shade better than very poor. As expected, the credit score after bankruptcy dropped. But since I now have no debts except those that I reaffirmed (first and second mortgages, two very small loans on our cars), I expect it to improve over the next few months.

Note that I do not plan to get any loans or need credit right now, so this is OK. I still have a second mortgage with a line of credit. I could borrow from that in emergency. But I will try not to.

I will be trying to improve my credit score by getting a secured credit card, and making sure I have no negative marks on my credit report (excepting the Bankruptcy).

I recommend using the free trial from MyFICO to get your credit score after bankruptcy, or preferably before you file. I DO NOT RECOMMEND the creditreport.com or freecreditreport.com websites. That is the subject of another post! Scam alert – you have been warned.

You visited a few times and I would appreciate your thoughts on this post, why not comment?

Technorati Tags: Bankruptcy, credit after bankruptcy, credit score, rebuilding credit

Fair Isaac, the company that conceived the score known as FICO, says Experian, one of the three major credit bureaus, will no longer allow it to sell scores based on Experian’s data. Basically, Fair Isaac is a competitor of Experian, so Experian is going out on its own.

Email from Fair Isaac:

Fair Isaac has long been committed to empowering consumers with information. Besides helping consumers understand and manage their credit profiles, we believe that consumers are entitled to know their FICO® scores from all three major credit bureaus, since these are the scores lenders use to make credit decisions.

We were recently notified that, effective February 14th, Experian will no longer allow consumers to view their FICO® scores based upon Experian data. FICO® scores from Equifax and TransUnion will continue to be available on myFICO.com.

Three myFICO® products will be affected by this change:

• FICO® Credit Complete: No longer available as of February 14th, 2009.
• FICO® Standard: The single Experian FICO® score and report will no longer be available as of February 14th, 2009. You will still be able to obtain FICO® scores and reports from Equifax and TransUnion.
• Suze Orman’s FICO® Kit Platinum: The single Experian FICO® score and report will no longer be available as of February 14th, 2009. You will still be able to obtain FICO® scores and reports from Equifax and TransUnion.

Due to this situation, we must also request that prior to February 14th, 2009 you update all hyperlinks, marketing literature and other materials that you use to be consistent with the product changes described above, and to remove any references you may make in those materials or otherwise that may cause consumers to believe that the products they purchase entitle them to a FICO® score or report from Experian.

It is important to understand that a majority of lenders will continue to use Experian-based FICO® scores to make decisions about credit worthiness, yet these scores will not be available to consumers except for those enrolled in select Fair Isaac Scores on Statements® programs.

If you’re concerned about the fact that consumers will no longer be able to see or manage the scores Experian is selling to lenders, we encourage you to contact Experian directly.

So what does this mean to you?

You could use Experian to get your credit score, but it might be using a different scoring system, and of course different data to base its score upon.

It might be best to use the myFICO.com web site, or use the credit scores from TransUnion and Equifax. If you access your credit score from Experian,

Please Note, Be Very Cautious About “Credit Repair” Agencies

Where can I find out more about credit repair?

You visited a few times and I would appreciate your thoughts on this post, why not comment?

Technorati Tags: credit score, rebuilding credit

Today, a guest post by attorney David M. Siegel.

A recent court order has required the three major credit bureaus (Experian, Equifax and TransUnion) to clean up the credit reports of millions of consumers who have filed for Chapter 7 bankruptcy protection. What often has happened is that old debt, discharged in the bankruptcy filing continues to appear on individual’s credit reports.

The case has come out of the U.S. District Court for the Central District of California and the Honorable Judge David O. Carter has made the ruling. He has given the credit bureaus until today (October 1, 2008) to revamp their systems to handle making the required changes. According to Jane J. Kim of the Wall Street Journal, Experian and TransUnion appear to have already updated their systems. Equifax, on the other hand, has not issued a comment.

In my personal experience as a consumer bankruptcy attorney, I have heard countless horror stories from clients whose credit reports were filled with misinformation. Particularly, discharged debts were not properly updated on the credit bureaus. The creditor, who has just had a debt eliminated, has no incentive to help assist the debtor by reporting the debt as discharged to the bureaus. Under the new court order, the impetus has been placed on the bureaus to make sure that prior debt, discharged in a chapter 7 bankruptcy case, does not show as due and owing.

As a bankruptcy attorney, I always advise about the fresh start that Chapter 7 usually provides. The misinformation on the credit bureaus after the discharge has been a frustrating event that debtors have had to confront. It usually involved a letter writing campaign, disputing the negative items on a credit report that should have been eliminated.

It will be very interesting to see what kind of bounce prior clients receive to their credit score. It could mean a substantial savings when it comes to obtaining future credit. With the credit score being so important today, any increase in the credit score can means thousands of dollars over the course of an auto loan or mortgage.

If you have had a Chapter 7 bankruptcy case within the last ten years, I would recommend obtaining a copy of each of your three credit reports from the major bureaus. This can be done for free at www.annualcreditreport.com. If you are seeing negative information that should have been removed, take the necessary time to dispute that information in writing. By doing so, and with the help of the recent court order, you should see an increase in your credit score.

——

David M. Siegel is the author of Chapter 7 Success: The Complete Guide to Surviving Personal Bankruptcy. He is a member of the American Bankruptcy Institute and currently practices bankruptcy law in Chicago and its surrounding suburbs. Additional information is available at Chicago Bankruptcy.

You visited a few times and I would appreciate your thoughts on this post, why not comment?

Technorati Tags: credit after bankruptcy