How do you fix your credit after a bankruptcy?

**MikeandMattsMom** · 12-08-2009, 02:32 PM

My hubby and I filed and its been 1 year since our discharge. Does anyone have any experience with how to start bringing up our credit score or is it just something we have to wait out for 10 years? Is there something we can do to help the process?
Thanks!

Lisa

**Greebo** · 12-08-2009, 02:36 PM

A bankruptcy stays on your credit report for 10 years. You cannot get it removed - it's a perfectly valid item to have showing.

More importantly - do you think getting back into debt is a good plan? Because that is the ONLY way to improve your credit score - go into debt.

**MikeandMattsMom** · 12-08-2009, 04:30 PM

guess we just wait it out then!!! Thanks!

**Palooka** · 12-09-2009, 12:26 AM

Or you could apply for one of those like 200 dollar limit credit cards and use it and pay it off ASAP.

No, I didn't just say that. I didn't.

Seriously though. I've known a few people that Bankruptsy seemed to never really affect them...As in trying to bring up their score. It just worked out for them and not going into debt again.

**Greebo** · 12-09-2009, 06:38 AM

Oh you can raise your score, sure - the BK will hurt your score for 10 years but you can still improve it over time.

But again - going into debt didn't apparently work out too well the first time - so why would you want to do it again?

**MikeandMattsMom** · 12-09-2009, 06:57 AM

oh i definatly DONT want to go into debt. I dont think I can even qualify for a credit card can I??
Its been a year and it hasnt affected us in ANY way. Im sure that one day before the 10 years is up, we will be reminded of it, but honestly, nothing yet.
We own our home and we always just pay cash for used cars, have never owned new.
I just feel like I should be doing something to fix it i dont know maybe its just me??

How about one of those credit cards where I sent them like 2 or 300 dollars and you borrow against your own money? What are they called? Im thinking secured credit card?
Would it help much I wonder?

**Greebo** · 12-09-2009, 08:57 AM

Listen - the FICO score is simply an "I love debt" score. The only way to get a GOOD FICO score is to go into debt and pay on that debt.

You have a house. You have paid for cars. You're ahead of the game right now.

Were *I* in your shoes, I'd forget the credit score - I'd focus first on ensuring financial security for the future, then second on going back to the creditors from the bankruptcy and repaying them anyway. However, you're under no legal obligation to do that - it's just what I would do.

If you never, ever, ever get into debt again - not for houses, cars, and especially not with credit cards (DANGER, UNSAFE), here is what will happen to your credit score:

It will vanish.

Over time, all of the negatives - which are valid - will fall away. In 10 years, you will have "no credit history". You won't exist as far as the lenders are concerned. And you'll have cash in the bank from your savings, a future that looks good, and be beholden to no one.

**** the credit score.

**Inkstain82** · 12-09-2009, 09:38 AM

Agreed with Greebo. A credit score is insanely overrated.

People who are good with money and have a great credit score have a useful tool in their financial life.

Those of us who have already blown that spend way too much time obsessing over how to get a credit score from "awful" to "kinda bad" or from "decent" to "slightly better." And there's not really any payoff.

You might pay a little more for insurance, but you can avoid that if you shop around.

Otherwise, there's no downside to a bad credit score if you don't plan on taking on debt. Yes, theoretically you can be denied renting a place to live, but I've never known a landlord who wouldn't accept a large amount of cash in advance instead. Yes, you can theoretically be denied a job for your credit score, but I've never known it to actually happen to anyone who wasn't applying to work directly with money.

**suebeehoney** · 12-09-2009, 12:39 PM

The best thing you can do is simply pay everything on time, and DON'T RUSH BACK INTO ANYTHING.

You may find that you get a bunch of credit card offers in the mail after your bankruptcy is discharged - don't fall for it. These companies are COUNTING on your desperation for credit, and hoping you will apply, apply, apply for those cards. Don't do it. Wait and bide your time until your credit improves and (if you must) get a card through your credit union with a low interest rate. Then charge a little and pay it off - every month - on time. That will show that you have the willpower to control your spending, and that you are a good steward of your credit...and your score will slowly rise.

But I do agree with others here - if you don't absolutely need credit (like for a house or car), just deal in cash on the barrelhead...like the old days. The result? Maybe your credit score won't go up, but you also won't be in debt up to your ears.

**Greebo** · 12-09-2009, 12:55 PM

Originally Posted by suebeehoney

But I do agree with others here - if you don't absolutely need credit (like for a house or car),

GAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAH!!!

You DO NOT NEED credit for a CAR!!!

Greebo bursts an artery...

**Mom2-3** · 12-09-2009, 01:03 PM

I would do the secured credit card. You can go through your local bank or credit union. They usually have a $500 limit.

Paying your debts on time (house and car) will also raise your fico score slowly.

**BerryWriter** · 12-10-2009, 07:03 AM

Originally Posted by Inkstain82

Agreed with Greebo. A credit score is insanely overrated.

People who are good with money and have a great credit score have a useful tool in their financial life.

Those of us who have already blown that spend way too much time obsessing over how to get a credit score from "awful" to "kinda bad" or from "decent" to "slightly better." And there's not really any payoff.

You might pay a little more for insurance, but you can avoid that if you shop around.

Otherwise, there's no downside to a bad credit score if you don't plan on taking on debt. Yes, theoretically you can be denied renting a place to live, but I've never known a landlord who wouldn't accept a large amount of cash in advance instead. Yes, you can theoretically be denied a job for your credit score, but I've never known it to actually happen to anyone who wasn't applying to work directly with money.

I also believe it can be hard to get a bank account if your credit score is bad but I'm not sure.

I really think it's complete discrimination to deny someone a job because they have bad credit unless they are apply for a job as a brinks driver or casino worker or something.

As far as renting, I would think if you have strong references and past landlords who will vouch for you and let prospective ones know you never missed a rent payment or were late you would probably be just fine.

I think credit scores are highly overrated. Once we get ourselves out of this mess we we never touch a credit card again. It's cash or nothing. Debt sucks hard.

**joyofsix** · 12-10-2009, 07:23 AM

I was going to launch, but Greebo and Inkstain beat me to it. If you're not going to borrow you don't need a credit score. Easy peasy. Dh and I only owe on the house so we look great but once it's paid off we'll look terrible at 0 and nothing will have changed so what good is it anyway?

**Contrary Housewife** · 12-10-2009, 11:04 AM

It is not hard to open a bank account with bad or no credit. If it was, teenagers and college students would never be able to get accounts. All banks are happy to take your deposit. It may be tough to get a loan without collateral, though.

I also think the chances of being denied a job from bad credit are pretty slim in most cases (govt jobs and jobs dealing with money aside). DH has gone through several background checks (where they ran his credit and checked his police record) and never had an issue landing a job in the 7 years since we defaulted on our CCs. He's also got late taxes and non-payment of child support (both since taken care of) on there.

Most employers never actually bother, even though it says on the application that they will do it.

IMO "credit scores" are just a way for companies to prey on nervous and gullible consumers and sell them useless monthly reports.

**Inkstain82** · 12-10-2009, 12:17 PM

Originally Posted by BerryWriter

I also believe it can be hard to get a bank account if your credit score is bad but I'm not sure.

Banks use a separate system known as "CHEX" to keep track of people who have had bank accounts closed with negative balances.

Inkstain
(who unfortunately knows this one the hard way)