Rebuilding Credit 1 year after discharge...My experience

[kane21]

Google andforums have helped me a lot when it came to learning about the bankruptcy andpost BR process, and thought I would share my experience for people finding themselvesin the same boat I was.

 

 

 

March 2011: Filed for BR, went as smooth as it could go.Long story short, investing on leverage and day trading are just as bad asgoing to casino on credit, and I recognized that this was a problem when it wastoo late, but trust me I learned my lesson.

 

December 2011: Discharged after 9 months

 

January 2012: I applied for a Capital One Secured card andeasily approved (minimum deposit is $300, I sent in $400).

 

March 2012: applied for a People’s Trust mastercard and waseasily approved as well ($500 minimum deposit which I sent in).

 

April 2012: applied for a National Bank secured creditcard (I work for National Bank, but they were included in BR since I couldn’t makepreferential payments before filing). I was told I needed to be refused firstfor a regular CC then give 150% deposit, and surprisingly I was still refused

 

Anyone outsideof Quebec can also get a Home Trust secured credit card easily, but since I livein Quebec, I am not eligible.

 

I use my 2 securedcredit cards a lot, and pay them off fully every month. Starting in September 2012I would pay off whatever I use every night since I wanted to apply for another cardat the 1 year mark since discharge, and figured having zero balances wouldhelp.

 

August, my Equifax score was 550. After paying offcredit cards every night for a couple months, it jumped to 577 in November.

 

November 20^, 2012: Apply for a Canadian TireMastercard (not a store card), and yesterday to my surprise in the mail, I gota card with a $500 limit. And best part is, I wasn’t notified of any hardcredit checks by Equifax (I have the $15/month service with them where theyemail me anytime there was a check).

 

I will bechecking by credit score end of December and will update thread. But I was verypleased to see how easily I was approved for a Canadian Tire card.

 

I also have2 cell phone lines with Rogers, which I would fully pay every month, but I noticedthat even if not late on a payment, owing them money when you make a creditcheck leads to a lower score. I found it best to pay the bill and do check aweek later. Credit checks when all your accounts are paid is the ideal in myopinion.

 

The onlybanks that weren’t included in my BR are Scotia, Desjardins and Laurentien, andI don’t like those last two. So I will be opening a bank account at Scotia thisweek and depositing all my money there in hopes of building a history with themand possibly getting a card next year. AMEX was included, so forget them. Andthough MBNA wasn’t, I read on their site the prerequisite to apply is to beCLEAR of BR on your credit file, so that’s a no go.

 

 

 

I plan tocontinue to use my credit cards heavily for everything and paying them offevery day after use, and use the Canadian Tire card the most since itsunsecured and could lead to credit limit increases. I don’t need credit, I havesavings….I am just doing this to rebuild.

 

 

[FrugalFinance]

Congratulations on being able to rebuild credit!!

 

Dang, canadian credit cards all seem to come with a lot of fees...150 percent collateral?

 

 

 

 

 

Out of curiosity, can you speak French? I noticed you live in Quebec.

[Guest w_a_y_n_e]

1354642963[/url]' post='4776726']

Google andforums have helped me a lot when it came to learning about the bankruptcy andpost BR process, and thought I would share my experience for people finding themselvesin the same boat I was.

 

 

 

March 2011: Filed for BR, went as smooth as it could go.Long story short, investing on leverage and day trading are just as bad asgoing to casino on credit, and I recognized that this was a problem when it wastoo late, but trust me I learned my lesson.

 

December 2011: Discharged after 9 months

 

January 2012: I applied for a Capital One Secured card andeasily approved (minimum deposit is $300, I sent in $400).

 

March 2012: applied for a People's Trust mastercard and waseasily approved as well ($500 minimum deposit which I sent in).

 

April 2012: applied for a National Bank secured creditcard (I work for National Bank, but they were included in BR since I couldn't makepreferential payments before filing). I was told I needed to be refused firstfor a regular CC then give 150% deposit, and surprisingly I was still refused

 

Anyone outsideof Quebec can also get a Home Trust secured credit card easily, but since I livein Quebec, I am not eligible.

 

I use my 2 securedcredit cards a lot, and pay them off fully every month. Starting in September 2012I would pay off whatever I use every night since I wanted to apply for another cardat the 1 year mark since discharge, and figured having zero balances wouldhelp.

 

August, my Equifax score was 550. After paying offcredit cards every night for a couple months, it jumped to 577 in November.

 

November 20^, 2012: Apply for a Canadian TireMastercard (not a store card), and yesterday to my surprise in the mail, I gota card with a $500 limit. And best part is, I wasn't notified of any hardcredit checks by Equifax (I have the $15/month service with them where theyemail me anytime there was a check).

 

I will bechecking by credit score end of December and will update thread. But I was verypleased to see how easily I was approved for a Canadian Tire card.

 

I also have2 cell phone lines with Rogers, which I would fully pay every month, but I noticedthat even if not late on a payment, owing them money when you make a creditcheck leads to a lower score. I found it best to pay the bill and do check aweek later. Credit checks when all your accounts are paid is the ideal in myopinion.

 

The onlybanks that weren't included in my BR are Scotia, Desjardins and Laurentien, andI don't like those last two. So I will be opening a bank account at Scotia thisweek and depositing all my money there in hopes of building a history with themand possibly getting a card next year. AMEX was included, so forget them. Andthough MBNA wasn't, I read on their site the prerequisite to apply is to beCLEAR of BR on your credit file, so that's a no go.

 

 

 

I plan tocontinue to use my credit cards heavily for everything and paying them offevery day after use, and use the Canadian Tire card the most since itsunsecured and could lead to credit limit increases. I don't need credit, I havesavings….I am just doing this to rebuild.

 

 

1. You wouldn't have gotten an inquiry notification from Equifax, because CTFS pulls Transunion exclusively, though they do report to both, as most do.2. Your cell bill has absolutely zero to do with your credit score. The scoring models do not take any mobile accounts into consideration, including balances on these accounts. If your score has seen changes, it's definitely something else changing the score, not the mobile account.3. Glad to hear you got the earliest start possible on rebuilding your credit. Many people don't think of starting right away after discharge, and don't consider secured cards as a way of doing so. Albeit small limits, secured cards will do the trick to rebuild your credit as long as you be careful with the utilization on those cards.4. You now have 3 credit cards obtained in a very short period of time. Your average account age is almost non existent. You should not apply for anymore credit products, as each account you add shortens your already very low AAOA. Instead, now that you have a CT MasterCard, wait 6 months and apply for an increase to the limit on that card. CT is pretty good at increasing limits to people that show their worthy of it. And adding more available credit helps in your utilization ratio, without decreasing your AAOA.

My 2 cents only.

 

 

[L-Bo]

Unfortunately Scotia is pretty conservative with unsecured credit and won't approve anything as long as the BK is still on file with the bureaus. However, seeing as how all of the other major banks were involved in the BK, it can't hurt to start up relations with them, even if it is a while in the future before any credit can happen. And there is always the chance of an exception being made, although that is pretty unlikely as well. They also don't do secured cards for anyone other than new immigrants and people with no previous credit history.

 

As far as the average age of account thing goes, the accounts that were included in the BK will continue to contribute to that until they fall off the report. In the mean time, it is good to get a couple of accounts started and aging that you will keep indefinitely (i.e., unsecured cards, as the secured ones that you already have will never unsecure). Canadian Tire is a really good start. National Bank as well. Too bad they declined though because their policy is that they will issue cards--even unsecured in many cases--one year post discharge. The caveat is that you need to have not included them in the BK. Having done so, I don't know what that does to their timeline as far as getting back in goes, but as an employee your odds are far better than anyone else's. I would personally avoid Hone Trust. Nothing wrong with them or anything, but their card will only ever be a secured card and it is certainly not free, so keeping it long term is an expensive venture.

 

Places that may issue secured cards that could eventually become unseured cards while maintaining all account history include credit unions that issue CUETS (now MBNA) cards, Vancity (but only available to folks in B.C.), and possibly TD (which is a no go for now since they were in the BK, although they may be willing to play ball in the future when the BK drops).

 

All up it is a pretty long road to a full and complete recovery from bankruptcy, but you are making excellent progress so far. Just keep on going!

 

L

[kane21]

Yes , i do speak french :-)<div><br></div><div>I guess the Rogers thing was one of the myths i heard, unless it only hurts credit when you have unpaid accounts, but doesnt affect otherwise!? Now that I got a real CC, i wont be applying for any credit items for at least another year. I heard that capital one does change their secured cards into unsecured after 2 years (and on the way they sometimes increase the ratio to your security deposit). I will maintain the 3 cards, my hopes are to get a major bank card next year and get rid of the two secured cards.</div><div><br></div><div>Not that it makes a difference, but anyone wondering, i was 27 when i filed......</div>

[Guest w_a_y_n_e]

1354688866[/url]' post='4776996']As far as the average age of account thing goes, the accounts that were included in the BK will continue to contribute to that until they fall off the report

 

While this may be true with some of the many scoring models out there, closed TL's are NOT considered by Fico, the only nationally used credit score. Closed TL's contribute to the overall length of your history until they drop off the report, but they are not considered for average age.

[L-Bo]

Does Fico give out this tidbit of information voluntarily? As their formula is both proprietary and a closely guarded secret, I am interested to know whenever they directly reveal anything specific about it. As much as I have been able to legitimately find out so far is the basic breakdown of weights given to a few broad categories of credit data (i.e., utilization, inquiries, payment history, etc). This stuff is included in the reports from TransUnion and Equifax. But, where else can someone find out more about the actual formula? I am looking for sources that can be traced directly to the Fico corporation as I often advise people on credit repair in my job. Just did a bit of that today actually, but I don't know everything yet.

 

L-Bo

[Guest w_a_y_n_e]

1355034625[/url]' post='4778345']

Does Fico give out this tidbit of information voluntarily? As their formula is both proprietary and a closely guarded secret, I am interested to know whenever they directly reveal anything specific about it. As much as I have been able to legitimately find out so far is the basic breakdown of weights given to a few broad categories of credit data (i.e., utilization, inquiries, payment history, etc). This stuff is included in the reports from TransUnion and Equifax. But, where else can someone find out more about the actual formula? I am looking for sources that can be traced directly to the Fico corporation as I often advise people on credit repair in my job. Just did a bit of that today actually, but I don't know everything yet.

 

L-Bo

 

I doubt Fico will ever give out detailed information on the formula used. As for the AAOA factor, I used to think both open and closed accounts count towards AA, until I purchased online from Equifax, a copy of my credit report with Fico Score. On the "dashboard" of Equifax's website when you're logged into your account, it now tells you what your average age is. Calculating mine including closed accounts, I came up with a number hat was almost a year more than what Equifax was saying it is. So I did the calculation again, this time with open accounts only, and the number was right on the money. Now lets not forget, there are several versions of the Fico score, and several different other scoring models, so this could be different with each one.In my opinion, we should just have one scoring model, used everywhere, and be done with it. Credit scoring and credit bureaus are just so full of flaws these days, I doubt it will ever be perfect.

[L-Bo]

I totally agree--it's a seriously messed up system. And I'll give you a good example of why. Back in July I did the exact same thing as you. I bought my actual FICO score (not the stupid in-house Equifax one) and report from Equifax Canada. I saw for the first time that they now tell you the AAOA, and it said that mine was something like 6.9 years (roughly). Only problem is, I was BK in '08 (my own stupid fault) and don't have any open accounts older than 3 years. Of course, this led me to the exact opposite conclusion that you had come to about AAOA, because going only by open accounts, it couldn't be more than 2 years or so. Suffice to say, now I don't know what to think. What a system!