Get secured credit card?

**disneysteve** · 07-20-2009, 07:16 AM

I'd want to know a couple of things.

1. What was the cause of his bankruptcy?

2. Why does he feel he needs to have a credit card now?

3. If he does get a CC, why a secured card? If his bankruptcy was over 5 years ago and his FICO is in the 700s, I would think he would qualify for a regular CC at this point.

**boosami** · 07-20-2009, 07:19 AM

If you are thinking of buying a house soon, don't do anythig that will show up on your credit including applying for new credit. That will ensure you get the best rate possible on your home loan. Credit inquiries can lower your score temporarily for 6-12 months depending on how many and how close together they are.

Why get a high-fee secured credit card if his credit score would allow for a normal, no fee credit card? Have him get his free credit report from www.annualcreditreport.com and find out for sure what's on his credit report. It doesn't cost anything once a year.

**anonymous_saver** · 07-20-2009, 07:23 AM

(1) He had like $12,000-15,000 of credit card debt, and just kind of freaked out about having to pay it. I was with him then too, but didn't have all of the financial knowledge I do now. Too bad, because then I would have encouraged him to just pay it down piece by piece.

(2) Reason to have the credit card now, just to have it "just in case", we would freeze it in the freezer. And also, to help build up his FICO score. We don't think he NEEDS it, in fact he would likely make a $5 purchase on it every month or so, and then pay it off instantly.

(3) Perhaps you are right about the secured credit card. But I remember about 2 years ago he applied for a credit card and they only offered him a secured credit card (at the same credit union), so I guess I was just making that assumption they would do the same thing. At the time he decided not to get the card. We just wanted to make sure it wasn't a horrible idea for him to get a CC of any type within possibly a few months of buying a home.

And yes, he already gets his free credit reports, rotates them to get one every 4 months.

Thanks.

**disneysteve** · 07-20-2009, 07:44 AM

I would wait until after the home purchase. Don't do anything that isn't absolutely necessary credit-wise before the home purchase, as boosami said.

**boosami** · 07-20-2009, 08:31 AM

Originally posted by anonymous_saver View Post

And also, to help build up his FICO score. We don't think he NEEDS it, in fact he would likely make a $5 purchase on it every month or so, and then pay it off instantly.

...

And yes, he already gets his free credit reports, rotates them to get one every 4 months.

If his credit score is 700+ or even better 760+ he doesn't need to build up his score, and a secured card will certainly not do anything to help build it. At the 700+ point, there's really nothing you can do to improve your score but 1) continue to pay yor bills on time, 2) carry as little debt as possible, and 3) apply for new credit as sparsely as possible.

If he already gets his credit reports regularly, you shouldn't need to use BankRate.com's calculator to estimate his FICO score. You should be able to get a more accurate picture comparing the latest bureau scores from his reports. Even though they're not FICO, they are more tailored to his situation than the generic BankRate.com calculator.

**anonymous_saver** · 07-20-2009, 10:13 AM

Originally posted by boosami View Post

If his credit score is 700+ or even better 760+ he doesn't need to build up his score, and a secured card will certainly not do anything to help build it. At the 700+ point, there's really nothing you can do to improve your score but 1) continue to pay yor bills on time, 2) carry as little debt as possible, and 3) apply for new credit as sparsely as possible.

If he already gets his credit reports regularly, you shouldn't need to use BankRate.com's calculator to estimate his FICO score. You should be able to get a more accurate picture comparing the latest bureau scores from his reports. Even though they're not FICO, they are more tailored to his situation than the generic BankRate.com calculator.

We don't know what his score is, we have only been estimating. I'm hoping he's in the 700 range, but that just sounds a bit too hopeful to me seeing as though he went through a bankruptcy 5 years ago. Perhaps I'm wrong though.

Credit reports don't actually give FICO scores, but just your credit history. As in there are no scores on the actual free credit reports. I was just using the calculator to get a general idea. Perhaps it would be worth paying for one FICO score for him. I don't think it would be worth looking at my score, seeing as though 2 years ago it was 730 or 735 through one of the credit companies and I've only had good history since then. hmmm... wish learning your own FICO scores was free!

Thanks for the input so far.

**disneysteve** · 07-20-2009, 11:53 AM

Originally posted by anonymous_saver View Post

Perhaps it would be worth paying for one FICO score for him.

I would say so. Go to myfico.com and buy one score. At least that way, you've got a solid number instead of an estimate which may or may not be accurate.

**anonymous_saver** · 07-24-2009, 12:34 PM

We did decide to pay to get one of his FICO scores just to get a general idea of what his score is (we realize it can vary amongst the 3 places but not sure we want to pay for all 3 scores, what do you think?).

I did see the Score Watch thing on myFICO.com but realize that after 30 days you have to pay $89.95/year to enroll. I'm assuming they commit you to that year to get the free 30 days??

I guess just buying one directly from one of the 3 bureaus is the best idea. boooo...

Anyone know about any discounts for 1 FICO score?

Thanks for any advice in advance!

**anonymous_saver** · 07-26-2009, 06:40 PM

Update from Credit Report

Hi everyone, just wanted to give an update. My parter got one of his credit reports yesterday (the other two he will be getting shortly, he just messed up on using the wrong password too many times, so has to go through the security check measures...).

Anyways, his Experian credit report has 8 potentially negative items on his credit report, and 15 accounts in good standing.

One of the biggest suprises is it says a Macy's CC (now w/ only a $100 limit) is still open and is in good standing. This should have been included in his bankruptcy but apparently wasn't. I'm thinking he should call Macy's, say he lost his card and would like a replacement card, as long as that wouldn't include a credit check. We were thinking he would then go to Macy's, and buy maybe a small piece of chocolate or something they sell at the counters, and then paying off the bill right away when he gets it. At least with this, the card would stay active and wouldn't randomly be closed by Macy's. It seems like this is too good to be true that this account is still open!

The other piece of information that makes us mad. My partner went into bankruptcy in March 2004. 4 of the credit cards have either late payments or sent to collection comments AFTER the date of his bankruptcy had gone through. How can he dispute these items? He has tried before but nothing was done. Any advice?

After we get these things cleared up and hopefully he can just get his Macy's card replaced. At this point, we would wait a month or so and then check his FICO score. It seems that if he gets these late payments and collections off of his credit report that his FICO score could raise by a decent amount, I just wish I knew how much!

Any thoughts advice would be very welcomed. Thanks!

**boosami** · 07-27-2009, 05:10 AM

Originally posted by anonymous_saver View Post

The other piece of information that makes us mad. My partner went into bankruptcy in March 2004. 4 of the credit cards have either late payments or sent to collection comments AFTER the date of his bankruptcy had gone through. How can he dispute these items? He has tried before but nothing was done. Any advice?

Bankrupcy law says that the subsequent month after filing bankrupcy the creditors can no longer report the negative information. If he went in to BK in March and they reported late payments in March, they are accurate and allowed to be on the report. If they are after March they are inaccurate and can be disputed off the report. Register a dispute with the bureaus, not the creditors, and it should be removed. They will probably want proof of the filing date and BK so be prepared to send in paperwork.

On the Macy's note, I hope that works out for you! However, often accounts that show up as "open" are just because the creditor never reported them as closed to the bureaus. The Macy's card may still be officially closed at Macy's financial company.

**anonymous_saver** · 07-27-2009, 06:33 AM

Originally posted by boosami View Post

Bankrupcy law says that the subsequent month after filing bankrupcy the creditors can no longer report the negative information. If he went in to BK in March and they reported late payments in March, they are accurate and allowed to be on the report. If they are after March they are inaccurate and can be disputed off the report. Register a dispute with the bureaus, not the creditors, and it should be removed. They will probably want proof of the filing date and BK so be prepared to send in paperwork.

On the Macy's note, I hope that works out for you! However, often accounts that show up as "open" are just because the creditor never reported them as closed to the bureaus. The Macy's card may still be officially closed at Macy's financial company.

Yeah I'll have my partner get out his bankruptcy papers out tonight. I'm confident the bankruptcy either was in March or April of 2004. And the late payments and collections are all in May, June, and July of 2004. Which would be inaccurate. I'm assuming if he registers a dispute with the bureaus that he will have to send a letter and a copy of something showing his bankruptcy was in March 2004. That'd be fine, not much effort for getting these off his report! I could have sworn he tried to do this like 2 years ago and they didn't take it off, but I guess I could be mistaken.

Yes, we are crossing our fingers about the Macy's thing. That just seems to good to be true.

**boosami** · 07-27-2009, 08:19 AM

Here is the section of Bankrupcy code that might help you. (For Chapter 13 - Wage Earner Bankrupcy, which I am assuming is the correct one for your partner.)

Title 11, Chapter 13, Subchapter I, � 1301 "Stay of action against codebtor"

It states that creditors can't attempt to collect debt after an individual files for BK. The stay of action lasts for 20 days after the BK plan is filed. Unless granted otherwise by the court, the only time a creditor can resume collection is after that period, only if they were not included in receiving payments under the BK plan, and only if the debt was not discharged.

**anonymous_saver** · 07-27-2009, 09:07 AM

I thought it was Chapter 13 as well, but then I read his papers last night and it was Chapter 7. That doesn't even make sense to me at all. I think the place he went to didn't do a very good job on following the correct route for his situation.

That being said apparently his petition date was April 7, 2004. The discharge date was July 7, 2004. I'm hoping this means those late charges/collections after the petition date can be taken off of the report. It also is unfortunate because I think he does have one late charge in April 2004, which he would have paid the minimum amount due on the card, but didn't because he had filled out the bankruptcy paperwork.

Ugh, I wish companies that do bankruptcies with people would actually teach them and inform them of what they need to know.

**boosami** · 07-27-2009, 09:59 AM

For Chapter 7 you'll have to refer to: Title 11 Chapter 3 Subchapter IV � 362 "Automatic stay"

The stay starts at the filing of the petition and lasts until the case is closed, dismissed, or granted/denied for discharge. Unless otherwise granted by the court, of course.

Get secured credit card?