Source
r/personalfinance•
google_intern

How can my husband and I raise our credit score in the next year, following a bankruptcy that was discharged last April.

Credit

My husband and I were desperate enough to file bankruptcy before our daughter was born. All in all, it was the best choice and we are not strangled by debt any longer and have learned a lot. We are both very weary of debt, and credit now. However, we would like to buy a house in the future.

We are planning to start home shopping next spring, when our bankruptcy has a 2 year seasoning and we can (or so we've been told) quality for decent financing.

How can we raise our credit scores during this year? We both have 1 secured credit card each, which we both have each other as authorized users and we use for something non-major and then pay off the balance each month. Other than that, we don't really do much to raise our score.

Is there anything else we can do? Our scores have raised and they're not terrible but they are not great.

I still have student loans totaling 14,000 in my name with payments being made. However, these might not matter as I've been told we can finance a house through my husband alone. Also they loans aren't that major and probably don't look terrible on our debt to income ratio. My husband earns about 50,000 a year.

Thank you for taking the time to read this and offer help!

Posted May 8, 2017, 9:54 PM UTC

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mail323•

At this point you shouldn't have an issue getting unsecured cards. You need 3-5 open accounts for optimal FICO scoring. Just avoid applying for credit about 6-8 months before a mortgage.

When you go to apply for a mortgage you'll get the best score when one account reports a small balance (no more than $5-10) and the rest $0.

Also check your credit reports. Anything from before the bankruptcy should show a $0 balance and there should be no new collections accounts.

Read through these:

https://creditboards.com/forums/index.php?showtopic=540331

https://creditboards.com/forums/index.php?showtopic=544017

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google_internOP•

Thank you, I will open a few more cards and just keep with small balances paid off. Thanks for the links!

1
Koksnot•

This is going to be tough.

Rule of thumb with BKs is to put as much time between the discharge date and any new home financing.

I purchased 5yrs post BK, 30yr fixed @ 5%. However, I made sure to get several CCs, various financing and cleaned up my reports.

Pull your reports and make sure ALL debts listed in thr BK are shown as "included in BK" with a $0 amount owed.

Can you have anyonr add you as an AU on their good standing, long history cards?

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google_internOP•

Ok, I will get my reports and make sure everything is as it should be. I may be able to ask my parents if they could add me and my husband as AU. Thank you!

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1
Ojntoast•

I filed my bankruptcy 4 years ago, bought my home 2 years after that. Use your credit cards wisely, keep the utilization low, pay on time. Get a second card as soon as you can (both of you).

While many large lenders require bankruptcy to be 3-4 years out, I used the FHA guideline which only requires it to be 2 years out to get into our home. FHA is not a solution for everyone, but for our situation it worked perfectly, I dont even mind the PMI, because of all of the positives in my life.

There are other lenders out there who may look at 2 years and be ok with it, but i wasnt putting down 20% anyway, so FHA it was.

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google_internOP•

Do you have any idea if FHA allows 20% down? I know it's typically 3% but my husband and I are planning on 20% because we want to avoid the PMI. It's a pill we could swallow but I'd rather not. FHA is what I want because anything we buy will probably need work so we would do the FHA 203K loan.

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