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One year post Chap7, why is my FICO score back up to 700?


BostonBill
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Posted (edited)

I'm certainly not complaining. But my Chap7 case closed out 14 months ago, after a full investigation/audit by the Trustee (what a PITA).

 

I just checked all 3 credit bureau reports, and my FICO scores range from 690 to 710, to my total shock. And I haven't even started rebuilding credit yet. For example, I'll be getting a credit card soon. And I'm getting personal loan offers. I was expecting my FICO to wallow in the 500's for well over a year. 

 

But this is good. I'll be applying for an FHA mortgage at the 24-month mark (ten months from now).

 

Edited by BostonBill
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1 hour ago, hegemony said:

is everything reporting correctly? that's an outstanding early post BK FICO score. FWIW the highest my score ever got with PR and IIBs reporting was 738 (older FICO model).

 

And I'm willing to bet that was with 4+ years of water under the bridge post BK.  With a reported 700 FICO 14 mo out of BK.  If the dust settles and this can be confirmed, I may be the first in line to sign up for a "debt repair" seminar with @BostonBill!   (Expressed only with kindness ;) ).

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16 hours ago, hegemony said:

is everything reporting correctly? that's an outstanding early post BK FICO score. FWIW the highest my score ever got with PR and IIBs reporting was 738 (older FICO model).

 

 

 

It is listed. I just double-checked.

 

Chap 7 filing date: Nov 2020

Discharge date: Mar 2021 

 

Also what's interesting is that I had a state civil court judgment against me, that is still listed as 'open' on the state court docket. But, that does not show up on any of the credit reports.

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32 minutes ago, brainchasm said:

Well, in a way, you're now a safer bet.

It's not like you can BK again anytime soon... ;)

 

Good point. Yes, all of my borrowing now is through my LLC, via "venture debt". The VC's are fully aware of my past bankruptcy, so they know I can't declare again anytime soon  :-)

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29 minutes ago, nemo said:

@BostonBill, it sounds like you may have had excellent credit until just before the BK.  That would contribute to a good current score one year later.

 

That speculation could be accurate (BB's feedback should be interesting). 

 

However, most people are inclined to resist BK and thus run a good 12-24 stream of account delinquencies.  And, I presume that more than one or two accounts are involved here.

 

I don't doubt BB's account whatsoever, but I can't let go of a feeling that we don't have the full picture (not that I'm prepared to suggest that the rest of the picture comprises).

 

Still, there's no question that FICO 8 is more forgiving than the mortgage FICO's.  Bev and I have one 6-year old 30-day late reporting.  Our FICO 8's run 830-850, while our mortgage FICO's run 740-770.

 

I would be VERY interested to hear what @BostonBill's mortgage FICO's look like.

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13 hours ago, nemo said:

@BostonBill, it sounds like you may have had excellent credit until just before the BK.  That would contribute to a good current score one year later.

 

Yes, very true.

 

I had a 30 year perfect credit history, with many borrowing cycles of very large 6-figure balances that were always paid off. And my FICO scores were almost always about 10 to 30 points within the top possible score at the time.

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13 hours ago, hdporter said:

That speculation could be accurate (BB's feedback should be interesting). 

However, most people are inclined to resist BK and thus run a good 12-24 stream of account delinquencies.  And, I presume that more than one or two accounts are involved here.

I don't doubt BB's account whatsoever, but I can't let go of a feeling that we don't have the full picture (not that I'm prepared to suggest that the rest of the picture comprises).

Still, there's no question that FICO 8 is more forgiving than the mortgage FICO's.  Bev and I have one 6-year old 30-day late reporting.  Our FICO 8's run 830-850, while our mortgage FICO's run 740-770.

I would be VERY interested to hear what @BostonBill's mortgage FICO's look like.

 

(I also replied to Nemo above).

 

To answer your other questions. Yes, I stopped paying on about 20 accounts, roughly 18 months before filing Chap7. Total discharged amount ended up being about $600,000 (including a tort judgment that was totally unrelated to credit/borrowing). I have no idea if any of this is a factor in my current FICO. 

 

I didn't even know there was a "mortgage FICO" .... I am going to double check all of my FICO's with new reports this weekend, and I will post the scores here.

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33 minutes ago, BostonBill said:

 

To answer your other questions. Yes, I stopped paying on about 20 accounts, roughly 18 months before filing Chap7. Total discharged amount ended up being about $600,000 (including a tort judgment that was totally unrelated to credit/borrowing). I have no idea if any of this is a factor in my current FICO. 

 

I didn't even know there was a "mortgage FICO" .... I am going to double check all of my FICO's with new reports this weekend, and I will post the scores here.

 

I'm going to refrain from further comment re your current FICO score.  Just not in possession of sufficient info to intelligently discuss.  To the extent that your FICO 8's are 700+, it's cause for a considerable amount of satisfaction. 

 

You've exited bankruptcy and in short order possess prime credit-worthy scores.  (I'd expect that many consumer lenders would extend credit under prime terms; there will be some who evaluate risk under other measures, or include a measure of manual underwriting, where the recent bankruptcy may preclude credit approvals for the time being.)

 

Mortgage applications are scored under a FICO model that's prescribed by federal guarantee agencies, "Classic FICO", that was released in 2004.  FICO model versions at that time were specific to the CRA report being scored, with FICO 2 - Experian, FICO 4 - TransUnion, and FICO 5 - Equifax.

 

When you pull your FICO scores from myFICO.com, FICO 8 is the default score that's reported.  However, a number of alternate FICO scores are provided as well in a section headed "Score Versions by Loan Type".  Select "Mortgages" and you'll see your scores for these models.

 

 

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On 5/13/2022 at 9:20 AM, hdporter said:

[snip]

Still, there's no question that FICO 8 is more forgiving than the mortgage FICO's.  Bev and I have one 6-year old 30-day late reporting.  Our FICO 8's run 830-850, while our mortgage FICO's run 740-770. ... I would be VERY interested to hear what @BostonBill's mortgage FICO's look like.

.

As promised, I just checked all 3 bureaus:

.

Transunion Vantage3 score:   693

Equifax Vantage3 score:         698

Experian FICO8 score:            Blank ("not enough info/history")

.

If I get a new credit card, I can get those scores into the 710s or 720s within a few months. An FHA mortgage at the 24-month mark (post-Ch7) looks like it should be smooth sailing.

 

Overall, Chapter 7 bankruptcy was a relatively painless process, in hindsight. I was able to keep all of my assets (IRA, 401k, etc), and my FICO has recovered within a year.

 

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2 hours ago, BostonBill said:

.

As promised, I just checked all 3 bureaus:

.

Transunion Vantage3 score:   693

Equifax Vantage3 score:         698

Experian FICO8 score:            Blank ("not enough info/history")

.

If I get a new credit card, I can get those scores into the 710s or 720s within a few months. An FHA mortgage at the 24-month mark (post-Ch7) looks like it should be smooth sailing.

 

Overall, Chapter 7 bankruptcy was a relatively painless process, in hindsight. I was able to keep all of my assets (IRA, 401k, etc), and my FICO has recovered within a year.

 

 

You're in for a bit of an education.  (Nothing wrong with that, I've been learning every step of the way and just about when I think I've got a pretty good handle on the credit score thing, along comes an unexpected surprise that kicks me in the teeth!)

 

I recently refinanced a mortgage (where I still pinch myself daily that I scored a 15-yr at 2.375%!  ... sorry, never gonna stop crowing about that ;) ).  The point is that I'm just now trailing off of watching my various mortgage scores like a hawk.  (I just cancelled out a couple of monitoring subscriptions that permitted me to pull EX FICO's for Bev and myself at a whim.)

 

So, let me toss out a recent set of scores for EX under the various scoring models:

 

FICO 9:  835 (newer score model; infrequently used by lenders)

FICO 8:  864 (typically used by most lenders for consumer loans, other than mortgages)

FICO 2:  751 (this is the Experian score used by mortgage lenders)

VAN 4:   762 (up update on VantageScore 3)

VAN 3:   731 (an "educational" score.  It appears you can count the lenders using the score for decisions on one hand)

 

As you likely observe, my "scores" are all over the place.  The ones that are most relevant to creditor evaluation of my credit applications are FICO 2 and FICO 8.  The rest are just "alternate scores".  They have little predictive value in giving you an idea of what FICO 2/8 are ... you need to go to the "horses mouth" to get those (or, in limited cases, you can get specific scores free from a lender's website).

 

Your relevant FICO 2/8 scores may be higher or lower than the Vantage Scores you're in possession of.  They could also be spot on the mark.  The point is, there's no way of telling.  And even one you establish the difference between your Vantage and FICO's at a point in time, that difference will vary over time.

 

The bottom line is that the Vantage Scoring model was developed independently of FICO as a measure of risk.  There's good reason to think that either one could be as accurate as the other in the big picture.  However, only one model is the one that most lenders use in making credit decisions, thus that's the only one that's really relevant in personal credit management.

 

------------

As an aside, FICO 8/9 score names are used by all 3 CRA's to refer to a similar score model.  However, mortgage scores from the CRA's each have a unique "version" assigned to them:

 

FICO 2:  Experian

FICO 4:  TransUnion

FICO 5:  Experian

 

These were released in 1993.  They continue in use because the federal mortgage guarantee agencies must bless an update and, bureaucracies excel at being what they are.

 

 

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16 hours ago, hdporter said:

 

You're in for a bit of an education.  (Nothing wrong with that, I've been learning every step of the way and just about when I think I've got a pretty good handle on the credit score thing, along comes an unexpected surprise that kicks me in the teeth!)

 

Very good info, thank you. ... Wow, I had no idea there were so many different wrinkles on FICO scoring. This rabbit hole never seems to end  :-)

 

So then the question becomes: what (if anything) can I do with this information? .... From my research so far, it looks like I'll easily be able to obtain an FHA mortgage at the 2-year post bankruptcy mark, since my FICO is now way above their cutoff point. So the only question then is: what will my interest rate be? ....But even there, it's not that big of a delta (compared to if I had a higher FICO), because I'm buying a cheap Tiny House, for $50,000. So there's not a huge delta on interest $, on a $275/mo PITI payment.  

 

It seems like all I can do at this point to raise the FICO, is to start getting credit cards and making timely payments.

 

I need to call Experian tomorrow, and see if I can get that FICO8 score.

 

Thank you again.

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