HOW TO: From BK7 discharge to 700 in 24 months or less!Hey all, I wrote this for a friend who went through a BK recently... it outlines the steps I took.... I'm @ 18 months post BK in 3 days and expect that when my Zero + 9% balances report this month I'll be somewhere between 675 and 685, roughly 15pts away from my 700 goal with 6 months to go.
Any how, it's written as "you" and for someone living in NV (OneNevada CU reference), but this method really does work quite well:
ETA: Posters note: I am sure there are other ways to do this, and differing opinions about secured cards, balances, etc. I'm not saying that this is the ONLY way to rebuild after BK7, what I'm saying is that this plan WORKS.
Steps to rebuild after BK - Goal: 700 FICO 24 months or less after BK.
Pre-Step 1. Sign up for a Scorewatch subscription from MyFico.com so you can track your progress (http://www.myfico.com/Products/Products.aspx) It's the middle one, and is $14.95/mo. Do NOT pull your second SCORE POWER report until month 6. Set this up on your debit card until you get your Orchard Card (see below). Note: The score analyzer on MyFico doesn't seem to work if you have a BK, but it's fun to play with. You can pull a fresh, full score power every 6 months if you like.
If you want, once you have Score Power, you could check your FICO on your TU report as well, but don't monitor it, just pull it once.
There are NO other sites that you can pay for that will give you a true FICO score. They all sell FAKOs and are even more worthless than FICOs.
Fixing your credit report (in other words, making sure that all IIB accounts report as IIB):
1. Pull a copy of your 3 credit reports from www.annualcreditreport.com.
2. Run through with a pen and make sure that ALL accounts that were included in bankruptcy are noted as:
a. Zero Balance
b. Included in Bankruptcy
c. Current (not "default/derogatory" status"
3. For any accounts that do not meet all of the criteria in #2, file a dispute "Included in Bankruptcy" and "Incorrect Balance"
note: Disputes need to be done with ALL 3 Credit Reporting Agencies(CRA), see far below on how to do this. Include a copy of your discharge letter once you have it. You can include multiple inaccuracies in the same letter, but if you do that, make it a list/spreadsheet rather than paragraph format. Mail the 3 letters to each CRA (addresses below) CERTIFIED MAIL, RETURN RECEIPT REQUESTED (CMRRR).
4. Once you get your receipts back, wait about 30 days for the results. For anything that wasn't updated to the correct info, get the creditor info from your report and mail a letter to them, including ONLY the account for that creditor. Send this letter CMRRR as well. Example:
5.a At the same time, send a "Method of Verification" letter to the CRA, including a copy of the result sheet they mailed you, with the questionable accounts highlighted. Example: http://www.gimmelaw.com/legal-form-credit-repair-method-of-verification-demand
6. Wait 30 days from the day you get the receipt.
7. At this point the bad stuff should all be pretty much gone (or reporting correctly), even if it's not, it's probably best to just leave it alone.
Rebuilding/Re-establishing credit (some of this is at the same time you're doing the stuff above):
1. 15 days after you get your CMRRR receipts back from step 3, above, apply for an Orchard Bank Classic card.
b. You do NOT want a SECURED version of this card. If that's all they'll offer you, decline it, wait a couple months and try again. A lot of people might tell you that secured cards are OK, but they aren't. From the evidence I've seen, it's more difficult to swtich from a secured card to an unsecured than it is to go from a bad bank (like Credit One or First Premier) to a better unsecured. Worst case scenario, get a secured card from a Credit Union that will graduate to an unsecured version in 12 months.
2. The DAY AFTER you receive and activate your Orchard card, go to a OneNevada Credit Union branch and open a $1000/1year CREDIT BUILDER loan (if you do not already have a savings/checking with them, you'll need to open one of those, too. (www.onenevada.org)
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