Time is a BK’ers best friend

The comment I got yesterday reminded me to note this on here.  Chapter 7 filing stays on your credit for 10 years, however, the accounts discharged in the filing come off when they hit the 7 year mark.  This might not seem like a big thing, but trust me, it does have a positive impact on your scores.

The nice thing about it is that it’s a good way to help you hang in there when it seems like you will be punished for your past misdeeds forever. 

Back in 2001 when we filed, I thought 10 years was forever.  Now I’m 3 years away from it dropping off my reports and I’m stunned at how quickly the time has gone.  It’s a nice feeling, to know that I made it and I didn’t give in to the feeling of hopelessness about credit that I felt after we went through it.

And that brings up something I’d really like to mention.  Don’t give in to that feeling of “well, my credit is so bad now, it doesn’t matter what I do.”  I’ve seen many posts about that attitude and every single one of them comes to regret it.  DH and I almost gave in to that feeling during the “great financial crisis of 2001-2002.”  The bankruptcy was not a complete solution for us and we limped along, facing DH’s accident due to uninsured driver, my miscarriage and continuing health problems, and my high-risk pregnancy which did finally end up bringing us DS#1.

But each month after that time we saw a little improvement and gradually we were able to rise up past the bad credit scores and depressing attitude.

Now?  Well, now I watch my credit carefully and plan our finances with a firm eye to keeping everything as close to perfect as possible.  I accept the strange events that crop up (dog’s vet bill, fridge replacement, my hideously expensive contact lenses because I’m blind as a bat, DS#1 and his ER bill…).  I don’t cry over the fact that we can’t really travel and I certainly don’t care that we can’t have a new car.  Food is going up (http://www.msnbc.msn.com/id/24127314) and gas is insane.  The fact that we’re doing as well as we are is because we haven’t given in to that “oh well” attitude.

Time is your friend after BK.  Keep that in mind.  Rise above it and make a deal with yourself to NEVER get there again.  It’s worth it.  I know this firsthand.

As always, keep your credit clean and NEVER, EVER be late!

Update on results of credit clean-up and rebuild

I thought I wouldn’t have much to report at this point, but things have been going better than I ever expected.  So here are my scores as of today, and this is with approximately 2 months of credit clean-up and rebuild:

Transunion - 693
Equifax - 689
Experian - 690

It’s been a combination of factors, but this is a breakdown of the big things that have contributed:

1.  All of the accounts that were discharged with our Chapter 7 in 2001 are now gone and this was strictly due to age.  They fell off after the natural 7 year period.  I have to be honest on this one, it’s a relief to see them gone.  I still wish that I was in a financial position to have gone back and paid every one of those creditors off, but my English degree didn’t do much for me financially!  I apologize to all the creditors that got hit with that bankruptcy.  The only thing I can do to make amends at this point is to NEVER allow myself to end up in that situation again, medical issues or not.

2. I got duplicates off my record.  There were only a few, but it made a difference.

3.  I opened new tradelines that increased my available credit and decreased my utilization ratios.  This has helped boost my scores.

My process going foward will include building up my account histories and getting credit limit increases as time ages those accounts.  I am pruning out the accounts with bad terms and positioning myself so that we can buy the house we’re renting in a couple years.  I’ll continue to watch for errors on my reports, but mostly I will just make my payments on time (and in full, wherever possible).

It sounds so simple, doesn’t it?  The truth is, it’s been a lot of work and it’s taken patience - probably the one thing that I DON’T have!!  As it turns out, obsessing about it paid off.  What might be difficult now is just doing what I’m supposed to and not be active in the building process.  I’ve become so accustomed to working on this… what do I do now?

Well.  I have some more financial goals that I want to work on while I’m waiting for these accounts to age (and while I’m waiting to begin grad studies in August).  I want to establish a credit card account with Bank of America, mostly out of sheer determination to see something come of all these years I’ve been with them.

I’d like to transition to prime credit card companies, such as CITI and Chase.  Some day I’d like to be approved for an AMEX simply because they’ve never approved me and I’m stubborn.  Call them my “white whale.”  I’d love to get rid of my HSBC credit card and get a real Discover, but it’s not a huge issue for me. 

I have say that the Hooters MC I got for my husband to use has been the source of much amusement for him.  I know Merrick Bank isn’t prime, but I like them and they’ve treated me very well over the years.

One final word - Juniper still hasn’t taken any adverse action on that account I got in February.  I am still cautious, but so far I have to say that they’ve been very good to me.  Now if only I could get Capital One to do the same!!

So that’s my current status.  I’m very proud of how far my credit has come.  I hovered down in the low 600’s for a long time and never thought I’d be sitting this close to 700 on my own credit merits.  I’ll continue to prune, care for, and manage my new credit garden… even as I prepare to work on will, retirement planning, and school.

As always, keep it clean and NEVER, EVER be late!

Transunion Update and minor thoughts

After much work, my TU report is finally reporting everything correctly.  My TU FICO today is 691.  It feels so good!  My Experian is still down at 680, but even that is a score that makes me reasonably happy.

It’s a funny thing, how looking at my report and seeing it clean is such a satisfying thing.  I’m looking forward to EQ and EX joining TU in looking this pretty.

In an effort to make my credit history a bit stronger, I chatted with my mum and she has very kindly agreed to add me as an authorized user on two of her accounts.  I don’t want to use them, but the history on them will help.  It was hard talking to her about it, but I did it because the current credit environment makes me nervous.  I don’t want anything to happen to my good accounts because the lenders get twitchy.  That said, I know that FICO 08 will take away that benefit, but for the time being it’ll help me out.  The process is going to take a while and it means that I’ll still continue to watch everything like a hawk.  I have good credit monitoring services and I check all three bureaus frequently.

It may seem OCD of me, but given the world right now, I don’t think it’s a bad idea.

I suppose this is a case of better safe than sorry.

On the topic of my mum, it hit me today that I need to know some of her preferences if anything happens to her.  I need to read through her will and be familiar with what will happen.  It’s hard for me.  I hate the thought of her mortality, but I know that I need to be prepared just in case.  It also emphasizes to me that DH and I need to get our will done.  I consider this a very high priority and I’m going to try to set up the appointment for next week.  We have excellent term life insurance policies set up on both of us… We’ve talked to DH’s sister and her husband, who have agreed to take the boys if anything happens to both of us.  But there is so much more to do. 

On that note, I’m going to stop writing and send off the email to the attorney who is going to help us.  I hope I can maintain a clear head on this…

As always, keep it clean and NEVER be late!

Juniper, second statement and still no AA

I’m counting myself lucky.  Juniper is one exceedingly touchy bank and I’ve been expecting a credit limit decrease with them (at the very least) since I opened the account.  Why?  Well, I opened a few accounts at the same time and they are notorious for not liking this behaviour.  I believe the only company that is more touchy would be AMEX and that’s some pretty exhalted company for a borderline subprime company like Juny.

For all of my nervousness with them, I really do like the card and the web interface.  They give me my “Transrisk” score, which is supposed to measure my bankruptcy risk.  I watch it fluctuate and for the most part find it reassuring.  I haven’t had any problems with my payments posting properly and they seem to be fine with the balance I’m carrying right now (thanks to popping the new fridge on this card).  They’ll be paid in full, along with one other card, when the rebate check hits our account, but even if they weren’t, they fit comfortably in my monthly payment budget.

And this would lead to my next thought.  It is really nice to be at a place in my financial life where making my monthly payments is not a hardship or a struggle.  I don’t have many, as I don’t run balances on all my accounts, but those that I do have are easily paid, with extra made on each.  I remember years ago when there were times where it was a huge juggling act.  Of course I was mostly young and seriously stupid about many of my financial decisions back then.  I wish that I’d had the myFico forum back then.  Maybe I’d have woken up a bit sooner.

Or maybe not.  It seems like once you get into bad habits it gets easier and easier to do them.

And this isn’t just about our financial lives either.

Regardless, I now find myself paying better attention and managing things much better, although I have far to go.  And the sad part is this… I’m not making better money - not really.  I’m actually making less than I was in 2001.  But, and this is key, I am much happier and so is my husband. 

As I’ve noted before, education is the key for us.  We have to ride out the next few years, getting me through grad school and DH through his undergrad program.  If we pay our dues now, we will reap the rewards for the rest of our working lives.

And that is something to cheer about!

Remember, as always, keep it clean and NEVER be late!

and a small note on Bank of America

Last week (a week ago today, actually), my branch manager said she would call the card services people and chat with them about my possible secured card application.  She said she’d call me back within a day or two, but I still haven’t heard back from her.  I even called back in and left a message.

I doubt I’ll hear back.  It’s just one of those things.  She took good care of me last week, when I had a problem with my account, but I think that I’m out of luck with anything to do with card services.

bah.

Frustrations continue with Experian

I know that much of my frustrations with Experian will be gone after May comes and goes, but I’d love to share one of my recent experiences.

In March, one of my IIB accounts that should have dropped off due to age, showed as verified with them and a note was on the account about it being maintained on my report until 3/2008.  So this morning I logged into my report so that I could see it fallen off and it’s still there.  I pulled up my details on the account and now it’s stating that it’s due to report through 4/2008!

Now I’m battling my urge to call them up and ask what the hell is going on.  The thing of it is this, no matter what as of 5/2008 that sucker is done.  I’m wondering now whether or not it’s worth waiting on or if I should try to fight with them some more.  More score has fallen with them and I really don’t want to take any chances on adverse action with my current lenders.  At the same time, I’m cleaning up a few small items:  one account reporting with a balance that is paid to zero and is closed, one account that is still reporting with a balance from February that is paid to zero and is open, and one account that I was AU on but have been taken off needs to come off my reports.

Another EX frustration?  I have one account with RC Willey which was IIB.  Because of RC Willey’s stupid system, they are reporting two accounts.  This is wrong.  But I’m in a catch-22 situation.  I know how easy it is for the CBs to mess up and report things incorrectly.  I’m afraid to call and tell them that there is only one account (because 2 is definitely hurting my score) because then they might blow it yet again.  As of May those accounts should finally drop off.  I’m trying to decide if I should let them fall off naturally or if I should try to get EX to clean up this mistake.

Now, from an exterior perspective it might be easy to wonder why I don’t simply let things fall off naturally.  I can answer that easily:  With the current credit situation, lenders look very closely at their customers.  If you don’t take care of the bad stuff (and this includes erroneous information), you might find your rate suddenly increasing or your limit dropped drastically.  I certainly watch my accounts very closely to ensure that this doesn’t happen.  I don’t want any nasty surprises.

The fact is that it isn’t just the lenders who have to be extra vigilant now…. we, as borrowers, have to watch our reports and our accounts closely.  The lenders have become “twitchy,” as one poster on the myFico forums noted.  This means they will do what they think they need to do in order to protect their bottom-line and avoid bad debt.  In turn, we have to ensure that nothing shows up on our reports that might suggest to them we are riskier bets.

It’s a nerve-wracking situation, for both lenders and borrowers.  But I’ll comment this:  Some of it is the snake eating its own tail.  The situation is feeding itself right now.  Yes, I agree that much of it is based on reality - jobs are weak and layoffs are happening, housing values are down in most places and this has had a really negative impact on home sales, and lending is tightening up standards to almost a choke-hold.

At some point the tension is going to have to break.  No.  We don’t need to return to the lax standards before.  Yes.  A more conservative lending world needs to stay in play, but right now it appears that there is a lot of over-reacting going on.  As long as it keeps feeding itself, it will be hard for the cycle to turn around.

While I might be frustrated and grumpy with Experian, my score is still good enough that I can weather this.  I’ll weigh my choices over the next couple of days and decide whether or not the risks are worth it.  They may or may not get the call from me, asking them to correct this error. 

As always, keep it clean and NEVER be late.  (or over the limit or excessively high balances or …. well, you get the idea)

Learning patience

I’ve learned quite a bit over the last two months.  I’ve learned about utilization on my credit cards…. I’ve discovered the laws of time and how they govern our reports.  For example, you must wait 7 years for bad things to fall off your reports, UNLESS it’s a Chapter 7 bankruptcy (ouch) and that stays on for 10.  I knew about the 10 year thing, but the 7 year drop for other “baddies”?  That was one thing that cheered me a bit.

Now, though, I find that I’m less and less patient about these things coming off my reports.  I am looking forward to April 1st because an IIB account will drop off.  Then it’ll be a not-so-patient wait for June 1st, as I wait for more accounts to fall off.

Even worse, then I have to maintain some sort of sanity through 2009 as the last of that rough 2001-2002 period finally bite the dust. 

For the first time since that horrible downward spiral began, the “finish line” is almost in view.  2011 doesn’t seem quite so far away.  As it gets closer and closer, my sense of urgency increases.  I want to get there, so I can look back, wipe the sweat off my brow, and thank all those who gave great advice so I won’t ever end up there again.

For now though, it’s still a waiting game.  There is little reporting incorrectly.  I have duplicate accounts on Experian, but I won’t dispute the duplicate off because I’m afraid they’ll mess it up and verify them again.  This has been an on-going battle for the last 6 years and finally they are reporting it (them) correctly. 

I’m even excited about inquiries dropping off due to aging 12 months.  That is a sad, sad thing.

But every little point helps. 

Here’s the other thing I’ve learned - don’t keep an account that has poor terms just because of your credit score.  Life isn’t all about the scores.  It’s about making the right choices financially.  I gave Capital One the boot this weekend because they charged me an Annual Fee.  I do not pay AFs on ANY account.  I called in to cancel and they made what I can only call the most feeble attempt I’ve ever seen in order to keep my business.   No, they could not waive the AF and no, I’m still not eligible for a CLI. 

Fine, I told them, close the account.  They did.  That is the only way I could get out of the AF.  And so the card is chopped up, in little pieces in my garbage can.  It was a good start after the BK, but it also cost me at least 3 (THREE) AFs of $59 each.  I have no regrets about closing it.  Keeping it would have been financially imprudent of me.

So in answer to that question, “What’s in your wallet?”  I say “Not Capital One.”

If you are in credit repair mode, always keep in mind the bigger picture.  What you are going through now will pass and time will fade the scars on your credit history.  Eventually, the mistakes will drop off and your reports will look healthier and healthier… but ONLY if you practice restraint and look after your responsibilities!

That’s it for me.  I’ve got a child going in for oral surgery in two weeks, a dog who just had a big vet bill and a refrigerator that recently had to be replaced.  If all of this had hit just a few short years ago, I would have been running around, wondering what the hell I was going to do.  Instead, I’ve cleaned up my credit, gained trade lines that are sound and now I have the resources to absorb these “emergencies.”

And that right there is some peace of mind that I appreciate.

Remember:  Keep it clean and NEVER be late.

If I don’t blog this, I’ll go nuts…

I’d post this to my favorite forum, but I feel silly.  So instead I’ll post here! 

 As of April 1st, I have crummy stuff falling off my credit reports - nothing huge, just a couple of accounts that were included in BK and I’m waiting for them to drop off finally.  Then I have an inquiry falling off one report 4/3 (due to rental app) and another 4/4 (also due to rental app). 

So… here I sit, feeling horribly impatient because I want to see the score impacts these drops have.

I really think I need to get a hobby. 

Oh wait.  This IS my hobby.  And my OCD obsession… and a necessary evil.  All rolled into one.

Aren’t I lucky?

Seriously though.  My reports have been stable for a while now and I’d just like to see what will happen.  It’s going to make me nuts.  On top of that, I’m dying of curiosity to see what FICO 08 does for me, either bad or good.

Ok.  I’ve vented.  I feel marginally better.  I just wish I could be so busy for the next couple of days that I wouldn’t even notice the time passing.

And one last thing?  I’m planning to apply to Cap1 for a new cc.  Yes.  I know I don’t need another inquiry but here is my big WHY.  I am stuck with my oldest account being one of their “beginner” cards… bah.  I want a new product and then I will combine accounts in order to maintain my length of history with them, but get my CL up and improve the account type.

My patience with them is wearing thin.  Now it’s a matter of just waiting for the right timing.  And that part is really hard.

bah.

And a little reinforcement in the mail today

Some milestones come with a whoop and a holler, others arrive quietly while you aren’t looking.  My April 1st baddies drop-offs will be more of the loud and disorderly kind, but today something lovely happened.

I receive credit card offers in the mail all the time.  90% of the time they are horrible and after laughing at their terms, I rip them up into small pieces and discard them.  I’ve gotten to the point where I recognize the worst offenders immediately and always find confirmation when I see the names: First Premier, Tribute, etc.

Today was shaping up to be one of those days.  I got the mail, skimmed off the true stuff - ie, the bills and the magazines, then I noticed two credit card offers.  I knew immediately that the one with no names on the envelope was another cringe-worthy offer and I was right.  To my great surprise and joy, the other was from CITI. 

Now those who know understand the smile on my face.  CITI is prime.  Whether you’ve had good experiences with them, or bad, they are still a prime lender.

I actually got my first prime pre-approved offer in the mail today. 

Maybe it’ll be another year or two or longer, before I get a product with them, but for now I got that little bit of reinforcement I needed - that “Hey! You’re doing the right thing and those of us out here are watching you.”

For those folks who aren’t in the recovery mode, you might not understand, but this is a big deal.  With time I hope to see more and more of those prime logos. 

The only downside to this offer is that it’s a great one and I wish that I had a hope in hell of being approved, but I know that I don’t.  All that traveling I’ll be doing starting this fall?  Boy, I could sure use a decent rewards card for it.

That’s fine though.  I’ll take my smiling moment and keep it, just like I’m going to keep the ones that come in the future.  While I’m sitting here, waiting extremely impatiently for my credit reports to keep improving and those scores to keep working on up, I’ll have my little pieces of paper proof that I’m doing the right thing.

Cheers!

An update on the Bank of America Saga

My branch manager is checking in with the card services people to see if it’s going to be possible to do the secured card.  I need it as OD protection on my checking there.  I’m reluctant to close it out completely since we’ve had that particular account since 1998.

I love my WAMU account, but my confidence in them is still in the fledgling stage.  I need to see how we all weather the current financial pain.  Then I can make better decisions.

She may call me back today and let me know what they have to say.  I’m trying not to get my hopes up, but it seems that is my problem with them:  I always hope things will go well, but I’m never surprised when they don’t.

And, as I noted a few days ago, I’m doing the countdown to April 1st.  I’m curious to see how things change at that point.  The irony of it being April Fool’s Day isn’t lost on me, either.

My credit reports are kind of quiet right now.  I’m not seeing movement, either up or down.  They are just holding steady.  I know that things will have movement over the next couple of months, with a lot of clean-up happening in May and August.  That seems so far away right now.

An interesting note, though:  My branch manager at Bank of America mentioned the current credit crunch and how everyone is tightening up their lending.  This was almost a direct quote of the articles that I’ve been reading lately, so it’s apparent to me that either she’s reading those same articles or the articles are directly reflecting the industry response.  Either take on it strikes me as intriguing.

One final thought…  My statement on my Juniper account cuts on April 3rd.  I’m placing mental bets with myself as to whether or not they will cut my limit.  They have a notorious reputation for doing it and I’m watching them like a hawk. 

Luckily for me, I can pay them off between April 4th and May 2nd paydays.  The fridge was a necessity as the old one was dying.  I’m prepared to deal with the outcome on this.  I’ll post the results of both the BofA inquiry on secured card and the possible adverse action taken by Juniper.

I have something new to add to my tagline:  Go cash (for now), keep it clean, and NEVER be late.