Current Status: Equifax Beacon Score - 709 3 Major Credit Cards(Roughly $12K Limit with avg 8% utilization.) 2 Secured Lines of Credit (4.75 year old $11,000 Auto Loan now at $1,000 and 1.25 year old $26,500 Auto Loan now at $21,500). Questions: 1. I have a Chapter 7 that will fall off my credit next spring (Discharged 2003). How much score improvement can I expect from this? 2. How much will the 5 year old auto loan paying off this June hurt me over the next year? Im planning to buy a house next summer.
Welcome to Creditnet! Other than the bankruptcy, do you have any other negative marks remaining on your credit reports? Also, do you remember where your FICO scores were before your filed for chapter 7? I'm assuming they've already recovered quite a bit over the last 9 years. Regarding the auto loans, I don't think you'll see much of an impact since you have 2 loans and paying off one of them shouldn't hurt your overall credit mix.
No negative marks remaining other than the Chapter 7. I reaffirmed one car loan after the C7. Early on I really didnt attempt to rebuild credit in any organized way. I just payed the one car loan early or on time and traded it in for another when paid for. My 3 credit cards are 3-5 years old because I waited 4 years after the C7 before I applied for another. The following are rough scores. Fall 2002 (Filed Bankruptcy) - Beacon was 580. Spring 2003 (Bankruptcy Discharged) - Beacon was 600. Fall 2003 - Beacon was 620. Summer 2007 - Beacon was 680. (This is when I decided I really would have to get a credit card if I wanted any more improvement). Current - Beacon is 709.
Keep in mind this is really a total guess, but I don't think you'll see too much more of an improvement once the BK falls off. I would say your FICO scores will rise into the mid-700s after the BK is gone and then they'll of course continue to improve as you build positive payment history with the auto loan and credit cards. It looks like you're well on your way back to a good credit score.
I was talking to a friend thats a mortgage broker today. Without knowing my actual score he estimated me at Equifax 685-735 (Actual is 709) with the Bankruptcy and 715-765 without. So in his opinion approximately a 30 point bounce. Dont know if its accurate but I think a 30 point bounce will get me where I need to be to get a pretty good rate.
Yea, that's pretty much in line with what I was thinking. Once your get your scores above 750 you should be able to land a decent interest rate on your mortgage too.
