SavingsTalk.com

quicken · 10-31-2007, 02:07 PM

Ok 2005 I filed Bancruptcy (divorce ex hubby bad debts). Please don't tell me how that ruins your credit, because I am proof that there is life after Bancruptcy. I have a car now that I have been paying on for the last year, I have 4 years to go at 10% interest I overpay so it could be paid off even sooner. I have an Orchard Bank card that my limit has been raised to $600 on. Last May I got a Target card that started at $200 and has been raised to a $500 limit and just qualified to jump to a Target Visa for $4000.00. My credit score right now is still pretty low, 620 average. My goal is to get into a house within the next two years. For this I would like my credit score to go up to around 675 or higher. My only other payment that is outstanding is for $6000 in student loans. <br />What are my next steps? Another CC? Keep CC down and pay car/student loans more? Savings for home? Any advise is appreciated.<br />Thanks guys. You have both given good advise in the past. My nerves have me a little going with the larger limit for my Target card. I can see that being a very dangerous card if I let it get out of hand. But I have been keeping my minimums low on everything else, so if I keep that attitude with my cc I think I will be ok. I am a little concerned as I live in Seattle and the cost of housing just keeps rising. But I will take your advise and continue on the road to saving and the cc dance. I have been thinking about opening an orange account and just socking $100 to $200 a paycheck away. That way the money is not so obviously right in front of mine or my hubby's face. It's working with my 401K for sure, I have almost $2000 after starting in March and I don't even miss the money that is being taken out.<br />One other thing. Orchard Bank when I initially opened my account had something in the paperwork about an annual charge, but they never charged it. Should I be concerned? Or were they just happy to not have to add interest and charges to a low credit account? I use that card for gas and groceries and pay it every two weeks.<br />

Mazlow · 10-31-2007, 02:07 PM

Well, I'd like to be one of the first to congratulate you on your recovery from bankruptcy. You are partially correct that there is life after bankruptcy, but it's important to know that even though you have a 620 score and you're trying to get it to at least a 675, for at least the next 5 years, that bankruptcy's going to stick around. And to complicate matters with the recent events happening with the mortgage industry, applying for a loan will be that much harder. "Common sense" lending will start coming back into practice. What this means is that it will take more than just a credit score to get you into a house. Higher down payments and possibly collateral may come into play. So as it stands right now, You already have enough credit cards, and your car loan and student loans should suffice for installment credit. My suggestion would be to work on keeping the balances low on all your cards by developing a strong payment history, start paying off your student loans and your car and start a savings for your down payment closing costs and things of that nature for that house. While 2 years would be feasable into getting into the house, I believe that 3½-4 years would be a more realistic and safer timetable. Reason I say that is that you don't want to be in a rush to get into a house that you'll end up getting out of even quicker.

broker · 10-31-2007, 02:07 PM

I don't know if this helps or not but when we were applying for a car loan the woman at the bank told us the worst thing for credit is student loans. I didn't understand why. So if I was you I'd try to pay those off first.

webMonkey · 10-31-2007, 02:07 PM

Smoovy is correct.

Pilot · 10-31-2007, 02:07 PM

Congratulations, however with the debt you listed above
do you really WANT all that credit especially when you
go to apply for a Mortgage? Don't be maxing them out
and keep paying cash for what you want. All that credit
whether paid off or not will reflect the debt to credit ratio
when you apply for mortgage. The Bankruptcy is on
your credit report for 7 to 10 years. You want your credit
score above 700 for a much better interest rate and actually go to a Bank and not some "Mortgage" Company, that may special in Mortgages but gouch on interest. I would not
get the Target Visa at 4K. Too tempting to get in trouble
You have your Orchard that is enough.

10-31-2007, 02:07 PM	#1
quicken Greenhorn Join Date: Jul 2006 Posts: 27 Rep Power: 6	Improving Credit Score Two Charge Cards What Next? Ok 2005 I filed Bancruptcy (divorce ex hubby bad debts). Please don't tell me how that ruins your credit, because I am proof that there is life after Bancruptcy. I have a car now that I have been paying on for the last year, I have 4 years to go at 10% interest I overpay so it could be paid off even sooner. I have an Orchard Bank card that my limit has been raised to $600 on. Last May I got a Target card that started at $200 and has been raised to a $500 limit and just qualified to jump to a Target Visa for $4000.00. My credit score right now is still pretty low, 620 average. My goal is to get into a house within the next two years. For this I would like my credit score to go up to around 675 or higher. My only other payment that is outstanding is for $6000 in student loans. <br />What are my next steps? Another CC? Keep CC down and pay car/student loans more? Savings for home? Any advise is appreciated.<br />Thanks guys. You have both given good advise in the past. My nerves have me a little going with the larger limit for my Target card. I can see that being a very dangerous card if I let it get out of hand. But I have been keeping my minimums low on everything else, so if I keep that attitude with my cc I think I will be ok. I am a little concerned as I live in Seattle and the cost of housing just keeps rising. But I will take your advise and continue on the road to saving and the cc dance. I have been thinking about opening an orange account and just socking $100 to $200 a paycheck away. That way the money is not so obviously right in front of mine or my hubby's face. It's working with my 401K for sure, I have almost $2000 after starting in March and I don't even miss the money that is being taken out.<br />One other thing. Orchard Bank when I initially opened my account had something in the paperwork about an annual charge, but they never charged it. Should I be concerned? Or were they just happy to not have to add interest and charges to a low credit account? I use that card for gas and groceries and pay it every two weeks.<br />

10-31-2007, 02:07 PM	#2
Mazlow Greenhorn Join Date: Jul 2006 Posts: 9 Rep Power: 0	Improving Credit Score Two Charge Cards What Next? Well, I'd like to be one of the first to congratulate you on your recovery from bankruptcy. You are partially correct that there is life after bankruptcy, but it's important to know that even though you have a 620 score and you're trying to get it to at least a 675, for at least the next 5 years, that bankruptcy's going to stick around. And to complicate matters with the recent events happening with the mortgage industry, applying for a loan will be that much harder. "Common sense" lending will start coming back into practice. What this means is that it will take more than just a credit score to get you into a house. Higher down payments and possibly collateral may come into play. So as it stands right now, You already have enough credit cards, and your car loan and student loans should suffice for installment credit. My suggestion would be to work on keeping the balances low on all your cards by developing a strong payment history, start paying off your student loans and your car and start a savings for your down payment closing costs and things of that nature for that house. While 2 years would be feasable into getting into the house, I believe that 3½-4 years would be a more realistic and safer timetable. Reason I say that is that you don't want to be in a rush to get into a house that you'll end up getting out of even quicker.

10-31-2007, 02:07 PM	#3
broker Greenhorn Join Date: Jul 2006 Posts: 39 Rep Power: 6	Improving Credit Score Two Charge Cards What Next? I don't know if this helps or not but when we were applying for a car loan the woman at the bank told us the worst thing for credit is student loans. I didn't understand why. So if I was you I'd try to pay those off first.

10-31-2007, 02:07 PM	#4
webMonkey Greenhorn Join Date: Jul 2006 Posts: 18 Rep Power: 0	Improving Credit Score Two Charge Cards What Next? Smoovy is correct.

10-31-2007, 02:07 PM	#5
Pilot Greenhorn Join Date: Jul 2006 Posts: 8 Rep Power: 0	Improving Credit Score Two Charge Cards What Next? Congratulations, however with the debt you listed above do you really WANT all that credit especially when you go to apply for a Mortgage? Don't be maxing them out and keep paying cash for what you want. All that credit whether paid off or not will reflect the debt to credit ratio when you apply for mortgage. The Bankruptcy is on your credit report for 7 to 10 years. You want your credit score above 700 for a much better interest rate and actually go to a Bank and not some "Mortgage" Company, that may special in Mortgages but gouch on interest. I would not get the Target Visa at 4K. Too tempting to get in trouble You have your Orchard that is enough.

SavingsTalk.com

Your guide to saving money and making smart investments!