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.

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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?

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Technorati Tags: credit score, rebuilding credit

I already wrote that just a few days ago I got a credit card offer. Well add another offer – for an auto loan. Yes, I am in bankruptcy, they know that, yet I could get a car loan for $7500 to $35,000!I wonder what the interest rate is? 20%? Well it would be a secured loan, they could repossess the vehicle if I defaulted, and I cannot declare bankruptcy for eight more years.

I actually could use a new car, my convertible leaks, has bald tires, needs A/C fixed, etc., etc. But I think I will pass on getting into credit trouble for now. I will try to save some money for either fixing the old ‘95 LeBaron, or getting a newer (used) car for cash at some point in the future.

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Technorati Tags: credit after bankruptcy, rebuilding credit

I am clearly flagged as “Bad Credit Risk” due to my filing of bankruptcy. The credit reporting agencies all show the bankruptcy.

So today I got my first offer of a credit card!! So much for bankruptcy killing your credit worthiness.

Now, of course, my credit rating is bad, really bad. So this credit card offer is bad too. The fine print says that I could get a credit line up to $1500. I would have to pay an annual fee of $69, and the interest rate would be 23.90%. I might only get the minimum credit line of $200. They would charge the annual fee to the credit card, so I would start out paying them interest right away!

Why would someone want this? I sure don’t.

It is a way to re-establish your credit worthiness. You are paying for the privilege of having a credit card. You make regular payments, and your credit score starts to rise. Eventually, you could get a higher credit limit, lower rates, a card without the yearly fee.

But should you get one? I would wait. I don’t want to get back into credit card dependency again. If I were to default on a credit card (or other loan) during or after bankruptcy, I would be stuck with the debt. It cannot be discharged, and you cannot file another bankruptcy for eight years.

Here is what an article from MSN Money says:

• Nothing in credit is “forever.” A bankruptcy legally can remain on your credit report for up to 10 years, but its effect on your credit score can start to diminish the day your case is closed — if you adopt responsible credit habits such as paying your bills on time, using only a small portion of your available credit and not applying for too much credit at once.
• You have to get and use credit to build your credit score. Living on a cash-only basis may be a smart choice for those who really can’t handle credit. But if you want to rebuild your credit score, you can’t sit on the sidelines.

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Technorati Tags: credit after bankruptcy, credit cards, rebuilding credit