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Question By
chefmonte

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How can I raise my credit score 100 points in six months with a bankruptcy?

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repairing your credit

Helpful to 69 out of 77 people

ok, one way is to get a store credit card, it will have a small available balance.  Mine started out with 300.00.  Then after 6 months they review my history and gave me an increase.   Keep the spending low! Payments on time!  It wont be long before your credit score will go up.  

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28 People Helped

Fixed Income and just what you earn...

Helpful to 28 out of 30 people

My bankruptcy was in 2012 and in a years time able to go from (300) to last month Dec 14 2013 (561) . Today it is 1/18/2014 ( 666) Pls not an evil number....

I am disclaimering, I am not a banker nor in this industry my experience is just a matter of understanding the system and your self displine. Which is tiresome...  

  • I went to TDbank and set up the old fashion bank book account for savings. As they are the only bank that does this sort of account and not charge you...
  •  
  • Set up a secured credit card. Min is $500.00 then they'll give you a card.
  • Save you pennies as I had to use mine at one point.
  • A checking account that debits each month the electric,cable,cell phone,anything that need you to wriite a check debit  (It's never late)
  • Sit down with your pay check and figure out what you get paid monthly

If you can't pay all by first of the month,call each company that will debit your account and they will set you up  with a payment IE; Rent on the 1st, Electric on the 7th, Cable on the 14th on and on.

I pay groceries with the credit card so that I know what that expense is each month 

Pay it off each month with a little left over on the card so that it helps raise your credit numbers (remembering it is a revolving credit) . Sometimes I leave $25.00 on the credit card each month. put that on debit card so each month the bulk is taken out.

 

  • Try not to overspend on the card if there is not enough money at the end of the month to pay it.
  • Put at least $25.00 a week or $50.00 biweekly in the savings account where you won't ever touch it .( You will never miss it because you spend more anyway)
  • Get rid of the things you don't need .

You don't need all the premium channels on Cable,  a landline is expensive and you have a cell anyway.

Cable will give you all triple play (watch for fee's and taxes and question everything) even though it is just an annoyance.

Figure out what you can afford on a monthly basis.

DON'T OVERSPEND.

I always lived by these rules and they have worked. I went into bankruptcy because I lost my job of 14 yrs and lost everything. That is when you realize you don't need ANYTHING.

This is how I run my financial life and I hope it helps

A friend told me and I live by this " Don't get anxious it's just business".

Reply by
vbrooks7

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3 People Helped
Helpful to 3 out of 4 people

Budgeting, and opening a savings account and a secured credit card raise your score 366 points in a year?  I also have a cc with a $200 limit ,of which I kept at $0 balance for the first 4 months, that did nothing to my credit score as its only gone up 7 points in about 5 months. Also I have a student loan with about $5k left on it. I currently have a score of 660 with a goal to raise it by a 100 in 6 months. But your post gives me hope that it can actually be done a lot faster. Any advice?

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raising your score

Helpful to 28 out of 34 people

im sure there is one in most areas, but i purchesed a used vechical from a local car lot that caters to people with bad or no credit. i paid it off quickly and they did as promised.and reported my loan which indeed raised my score 100 points. only bad thing was this car lot is super high in intrest rates and only reported to one credt agency.

3 Contributions
14 People Helped

Budget and Low Debt to Income Ratio

Helpful to 12 out of 14 people

Make a budget first and foremost, you need to know what kind of debt you can pay.  Start with gross income, and then take out your taxes, savings (both to build a 90-180 day cash reserve and retirement), then take out Food, housing, utilities, insurance and finally miscellaneous expenses that include eating out and clothing. Find you have no income left, it's time to adjust your lifestyle downward to match your income.

Now, with the amount you have in surplus, consider this your maximum debt payments, you want to stay well under it, and other levels may restrict it further.  To start building, get 3-4 consumer credit lines (store credit cards, Visa / MC accounts), after that you would want to look at getting some kind of installment loan that has a fixed payment and payoff in X months.  The second may be a car loan, but I would keep the loan terms under 36 months, maybe even try for 12 or 24 months.  The final type and best loan is your mortgage.

Ratios to hold to: Keep credit cards under 20% of credit lines (i.e. $1000 credit line, use $200 or less each month and pay it off before interest accrues - reporting the debt is good to the credit agency).  FHA says you should make no more than 43% of gross income in debt payments, and 31% in total housing payment (principle, interest, insurance, taxes, and HOA).  Stay under these numbers!

Sources of credit, look to your local bank or credit union, and bank with them.  They can make local decisions not done by megabank computers.  SEcured credit cards are fine, my Credit Union holds 110% of my credit line in savings, but I pay no fees and no exorbitant interest rates and they fully report the credit line.  Avoid high cost credit cards.  Step by step process

Will this get you 100 points, hard to say, but it will get you financially right in life and make you low risk and not likely to return to bankruptcy.  Remember you can't declare again for 7 or 8 years, this is a clean start over.  The banks know this, and will look close at your income and ability to pay.  Keep it reasonable, borrow prudently and as needed.  Pay for some daily items on card and pay off each month as though it were delayed cash payments not long term pay offs.

Reply by
tashamgodfrey

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Great advice!

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3 People Helped

It can be done...

Helpful to 3 out of 3 people

I filed Chapter 13 in 2008 because of my ex's spending habits. I thought it was the end of the world, but since it has been Discharged in July2012 I have been diligent in restoring my credit and purchasing a new home again. At the time of my Chapter 13 Discharge, my credit scores were under 500. Today, my scores are 570, 560, and 565. I have purchased a 2013 Mercedes E350 and was a pproved through GM Financial. I obtained 2 credit cards with $300 and $200 credit limit and try to maintain their balances under 30%. Please don't think that filing for bankruptcy is the end of the world, it is a new beginning.

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bankruptsy

Hi I had to file bankruptsy to save a house from going to foreclosure while working with the bank on home affordable,  one was to a chapter 7 to clear debt the other was chapter 11 just filed application but never followed thru with the courts was just filed to hold off sale till bank gave me loan. It shows up on credit report one is bad enough but how do I take off the other one, I have documents showing that it was dropped.  Can you give me advice if I can have that taken   Thank you

Top Contributor
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Not likely to happen.

Helpful to 16 out of 32 people

A bankruptcy is a serious adverse report on your credit and will be for 10 years from the date of filing.  You can help your future by making regular. on-time payments on any credit accounts you currently have.  That will put positive remarks on your credit score but you may still have to work hard to  rebuild your score after the bankruptcy is completed.  Someone failed you by not explaining the pros and cons of filing bankruptcy.

Reply by
Dprezvip1

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9 People Helped
Helpful to 9 out of 10 people

Actually it depends on the type of bankrupcy you file.  While any bankrupcy is a negative aspect of ones credit it also is an OPPORTUNITY for clearing up debt which was unaffordable before bankrupcy.  If on is able to consolidate debts and afford to repay them that would be the best option.  If not' allowing debt to stagnate is credit suicide, making bankrupcy the best option. A clean slate is better than a dirty one.

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3 People Helped

Bankruptcy

Helpful to 3 out of 6 people

My husband filed bankruptcy in October 2012, because of his high medical bills, I was not included in the bankruptcy, but it is showing on my credit report, I went from a credit source of 780 to 688. What can I do

Reply by
buzzbean

3 Contributions
14 People Helped
Helpful to 2 out of 2 people

On of the things you did not mention is your state. This is important, if you are in a community property state, debt and assets are linked by the marriage (sadly you can't be financially independent without some extra documentation).   Assuming that you are not in a community property state, you need to get a copy of the bankruptcy (that shows you were not part of it) to the credit agency as part of a dispute.  If the court filings never show your name, never show your debts, you are not a part of it.  There may be an issue if any of the bankrupted debts were joint accounts.  You should be able to sort it out.  Your credit score is recoverable in a short period, but the bankruptcy at 10 years on record needs to go if you didn't participate in it.

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Helpful to 0 out of 1 people

I believe bankruptcy stays on your credit report for 10 years, although I may be wrong.  It's at least 7, though.

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bankrupcty

Helpful to 0 out of 2 people

How long before your bankruptcy is removed from your credit score. I took a bankrupcty 10 years ago.

Reply by
SusieinNJ

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16 People Helped
Helpful to 1 out of 2 people

I believe it's 10 years.  (It's at least 7.)

Reply by
buzzbean

3 Contributions
14 People Helped

You should be able to challenge record if it finalized more than 10 years ago, really more than 7 because the bankruptcy laws changed during that time frame I think.  Remember, it's date of the final order from the court, not date of filing.  So if you are at 9 years 8 months, you may have just a little longer to wait.

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