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Posted in Bankruptcy
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Question By
hoggiewolf

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0 People Helped
How can I raise my scorem by 250 in 6 months
Accounts in collections. Will I benefit by filing Chapter 13

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The Path To Good Credit After Bankruptc

Helpful to 34 out of 43 people

Prior to Bankruptcy:

You can mitigate the negative impact of a bankruptcy by making sure you pay your minimum amount due throughout the life of your credit cards. Late payments will drop your credit score so keep it up and think of the recovery. When a card is maxed you can stop payments all together if you wish, if you have available credit on any card service that minimum payment first.

Slowly max all your available credit making sure you only make essential purchases like food and bills.  When you have exhausted almost all credit it would be a good time to declare bankruptcy.

Save your cash for the recovery period as you will not have access to any substantial credit for a long time.

Join a Credit Union now!

After Filling:

Buy a used car and get an auto loan from your credit union, and apply for one of their secured credit cards. Making payments on your auto loan and credit card is the key to bringing your credit score back up.  Make sure your payments and bills are all on auto pay as failing to make a payment here will slow you down considerably.

 After six months your credit score should be high enough to get a Capital One Quicksilver One credit card.  There is an annual fee but it is an easy approval and the cash back helps.

After 1 year, refinance your auto loan with the Credit Union and your payments will drop with an APR around half of what you initially had.

This is the process I took, my score dropped from 750 – 650 during the bankruptcy and is now 712 just 2 years after filling. My Auto loan went from 13% to 5% and without the unpayable wall of monthly interest I am again financial stable.

Reply by
jeffwin02

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Helpful to 12 out of 22 people

This is excellent advice! Although it's too late for me to follow, I encourage others who are seriously considering bankruptcy to do it this way. I allowed all 12 of my cards to become over three months late and then took a 225 point hit when I filed bankruptcy. For some reason, however, my score recently went back up to 656 just a couple weeks after bk discharge. As far as I can see, the fact that three of the 12 cards still report as open and because a personal loan that was discharged also does the same, may have something to do with this strange turn of events. Both Transunion and Equifax show a 0 percent utilization rate as one of the reasons for my improved score. Yet all accounts save the personal loan show the bankruptcy. 

In any case, I will get a secured credit card and new loan on my car and be sure to pay on time (as I had always done prior to this past year). 

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Reply by
free88free88

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Helpful to 14 out of 17 people

That all sounds well and good, but a lot of judges nowadays arent going to fall for that.  They will expect that you have gone at least a year without being able to pay before they will approve your BK.  If you time it just right, maybe you can avoid judgments against you from individual lenders because you will be in protection, but the late payments will stack up.  More accounts, more late payments.  Their cumulative effect will be just as bad or worse as judgments against you.  Of course, those will be on your credit for the next 7 years either way. 

Good advice, is try to screw as few lenders as possible right before your BK.  The less you screw before BK, the faster your recovery.  If you got high-balanced accounts that you will strugle to pay, well, you might not be able to do anything about those.  Taking the hit will probably be the lessor evil over sending a $5k check.  But, I would recommend against screwing over the small accounts that can be easily and cheaply resolved.  Sending a couple hundred dollars here and there might be worth it to reduce the overall number of bad accounts and late payments before BK that, again, will stay on your credit for the next 7 years.  I know its tough to do, but it really is better for you.

I cannot say it enough.  BK does not wipe away your history.  You are not getting a clean slate.  Being really bad up until the day you go BK will only delay the recovery time.  With a few well targeted payoffs, you can greatly reduce that recovery time.

Reply by
gladedb

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Helpful to 11 out of 41 people

Great advice for sociopaths. Did you know that you are stealing when you "max out" your cards? Yes you did know that but you don't care. Find some personal responsibility and morals buddy.

Reply by
ptch7116

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0 People Helped

I can attest to the HUGE value of keeping-up with minimum payments. 2 years after Chapter 7, I have scores in the 700-725 range as well. We reafirmed our cars (only 2 years old), both received Credit One cards after 3 months, Cap One Quicksilver cards after 6 months and Barclay's after 1 year (Apple purchase). Now, we're buying a home - one we can actually AFFORD and still increase our savings - what a novel concept. ;)

DON'T WAIT to declare until after you're already severely behind.

However, ulike the OP suggests, we didn't intentionally max out our cards... because they were already maxed-out for several months! We could barely use them to purchase anything for at least 6 months, so there was no hint of "bankruptcy planning" per se.

We hem-hawed about declaring BR during those months... going thru the same feelings many others do, about "personal responsibility"  - but finally we decided we had to make a fresh start. We all make mistakes. Combine that with a crappy economy, and the options become limited.

We hit a bottom in cash, and realized it was an "ideal time" to declare. It was the **BEST** financial decision we ever made, and a 1st in a series of simiarly better decisions. No more trying to "keep up with the Joneses."

Good luck to whomever reads this, in finally taking back your financial & emotional freedom. :)

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86 People Helped
Most Helpful Response

Betty

Helpful to 86 out of 101 people

One good way to raise your credit score is to invest in a CD and then borrow against the CD. This is a fast was to increase your credit score. Keep in mind that payments must be made in a timely manner.

Good Luck!

Reply by
cmdriscoll

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239 People Helped
Helpful to 21 out of 37 people

Invest in a CD?? What is that??

Reply by
enilcita

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11 People Helped
Helpful to 11 out of 24 people

I have de same question? What's a CD?

Reply by
panyaje

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Helpful to 19 out of 36 people

what bank and CD size would you reccomend? I live in MN

Reply by
uniqulyme

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Helpful to 7 out of 8 people

I live on a fixed income.... can I still get a cd

Reply by
ricmar1788

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Helpful to 17 out of 21 people

Certificate Deposits or CD's are done through a bank or credit union. A CD is basically a deposit that you agree to not take out for a certain time 90 days, 180 days, 1 year, or 5 years and pays you a certain interest over the time selected. It usually requires a minimum of $500, and is not based on your credit. .If you do take out money then you are charged interest until you replace the funds, it basically provides a record of repayment using your own money. I hope that helps. Cheers!

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effectivness of bankrupcy.

Helpful to 78 out of 99 people

bankrupcies tend to stay on for 10 year.(been there) got 1 more year myself before 10th year. if your in deep bankrupcy will loer your score if you place it all in bankrupcy. try to keep home and vehicle loan. kill all medical and credit cards . it will be 1 to 2 years before i'd suggest trying to get another loan. Almost anyone with the income can get a car loan. just be prepared to eat some interest the first go round. by keeping a loan or two you will keep a payment history going. this will help sustain your score. Suppressing the collections and delinquent payments will help in long run. get all delinquent payment on home and auto paid up .but don't rush to pay off make every payment . history will help. i kept both car loans and the house... kept my score in 600's.... 650 2 years later will put you in auto buying position. the obama home plan worked good for me also and didn't change my score but lowered my payments.I'd inquire as to what home interst or payment reducton plans are available. FYI you have to b in financial distress... i have disabled wife and 2 kids 1 income.... good luck its going to be a hard fight but loosing a home or car( both needed) isn't going to help. rather loose points than home and way to work.

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boost your score

Helpful to 4 out of 4 people

Hello,

I recently raised my score about 100 points within 3 months.. so I wouldnt say 250 points in 6mon. is impossible. I was able to do this by paying off ALL of my open collections, disputing items that were already paid but still showing as an open/outstanding account....My scored jumped 100+ points just by doing that... I then obtained a secured visa credit card from my bank in the amount of $300 limit. I only spend about $50 a month on that card and make sure to pay it on time. Same with my $2000 capital one credit card, i never spend more than $300 and make sure to pay early. When paying your credit cards, i usually carried over a small balance, never paid the full amount, but make sure to pay more than the minimum. Hope this helps everyone.

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59 People Helped

Helpful to 35 out of 46 people

I think it is literally impossible to raise your score by 250 points in 6 months.  If this was possible everyone would be doing it.  Your credit score goes up and down from month to month depending on the activity that goes into your credit file.  I can only suggest you keep your credit utilization down and make all payments on time.  I am not for sure of what you are trying to accomplish but building credit takes time, effort and responsibility.  Good Luck.

Reply by
creditkardblues

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Helpful to 1 out of 4 people

Enter Your Reply     you are correct, pay your bills on time every time , 

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14 Contributions
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Chasing rainbows?

Helpful to 14 out of 17 people

Im at about 3 years post Chapter 7 BK.  I have been absolutely perfect with my credit since.  My score has gone up 190 points.  250 in six months?  Good luck with that.

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30 People Helped

Helpful to 20 out of 24 people

I think it's the "6 months" that is throwing me off. 

If you have multiple non-medical accounts in collections for less than 5 years - meaning they first hit your credit report less than 5 years ago, in North Carolina you would likely be required to pay them off in order to buy a house / get a mortgage. 

In order to improve your credit scores, you need to add GOOD information to your report as quickly as possible, and make certain no NEW Collections (or anything else negative frankly) goes on your credit file.  Although I've read differently on this forum today, our experience is that having more than 1 Secured Credit Card will help improve files quicker than installment debt. Especially if you have student loans.

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Definitely maybe!

Helpful to 23 out of 29 people

I relocated to the states in 2006 (now permanent resident) and my ex-wife had excellent credit. Since I had to also build up credit she advised me that she should add me to her accounts to help me out and it did work. By 2008 my credit score was almost 800 but another consideration was that I had a great job and it was full time and I worked full time and she didn't. Not sure how that works but I am thinking if anyone is trustworthy and has a family member that would try and help them build up credit by adding them in the loop of their accounts it might be a better way to build up the credit. Just be responsible and desiplined because if not you can ruin it for someone else that trusted you in the first place to have you added to accounts.

But again I am not certain if this really was the reason my credit score went up in such a short amount of years.

Good luck everyone trying to build up credit.

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35 Contributions
80 People Helped

Helpful to 32 out of 48 people

If you file for Chapter 13, it could drop 250 points. filing for bankruptcy is the absolute last resort. Chapter 13 stays with you for 7 years. 

you have other options like credit counseling with debt payment plans, consolidating your debts, or settling with collections. All of these are better than filing for bankruptcy. 

good luck

Reply by
bogoyusa

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Helpful to 13 out of 22 people

how can i get a loan to consolidate my bills, they won"t even approve me. so I"m stucked from loans to loans.

Reply by
queenmo1

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Helpful to 11 out of 20 people

actually bankruptcy affects your credit for more than 7 years.  It's 7 to15  I filed in 2005 and it still shows up So I should be good  in 2020  I'll be 70 ugh!

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15 People Helped

Credit Score > 200+ pts in six months?

Helpful to 15 out of 23 people

I hate to be the bearer of bad news, but I'm not sure that you can raise your credit score that much or that quickly.  We filed bankruptcy in 2008 due to overwhelming pharmacy costs.  We are now five years out from the judgement and although our score has gone up 60 points, we cannot get approved to refinanance our home.  We have two new credit cards with nice credit limits, but rebuilding our 40+ years of near perfect credit may never happen. 

If you are young andf have time you will eventually crawl up the credit score scale providing you make all of the payments on time and control credit and loan spending.  They do say that a car loan works to your crefit benefit more than revolving credit.  Because we are on a fixed income we cannot afford a newer car, so we are kind of stuck.  Therefore my information about long-term loans is just from what I have read and  not from personal experience.  Sorry I could not be of more help.  We are in the same boat.

If anyone else knows of a way to raise credit after a bankruptcy, please jump in to this thread.

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