So i checked credit report & score Monday…

My Score as of June 15, 2009

FICO Score Interest Rate Ranges

So I got curious on Monday. I went ahead and signed up for a year of unlimited credit reports from Equifax and bought my credit score. The product i bought was the 3-in-1 credit report so i could see results not just from Equifax, but also Transunion & Experian. For my credit score, I chose to Equifax. I figure that while the scores will vary from one source to another (upwards of 30-40 points either way), that my baseline was on Equifax, and I would continue only using them for now. I really wasn’t expecting much at this point. Boy, was I wrong.

On my credit report, I was amazed to see my accounts marked as in bankruptcy. The accounts I had were listed with $0 balances.

So you ask, what about my credit score? Well it could it could be worse. And once the house is foreclosed on, it will be worse, I imagine (more on that in a later post). However, after all the accounts (my AmEx, 2 Visas, and 1 medical collection that I have fought Aetna for a 1 1/2 years that finally went to collection) have been closed, marked in bankruptcy, & show a $0 balance, my score is [drum roll please]…. 554. This is just under a 130 point drop from just before the bankruptcy filing.

So what does this mean for me? Well, according to the charts on myFico.com, mortgage companies won’t touch anyone with a score less than 620 or so. In addition, for a 48 month car loan, a person with great credit (720+) would expect an interest rate of 5.961%.  I, on the other hand , with a current score of 554, would expect an interest rate of 16.353%.    The impact of of this on a loan of $25,000 would be an additional $126 per month of interest ($713 – $587).  Jeebus.

So what am I going to do now?  The good news is my accounts reflect a $0 balance.  I don’t have to dispute that.  I am currently reading posts in the myFICO.com forums (FICO Forums) to learn from other folks about how they have dealt with post-bankruptcy crap.  Seems to have a lot of decent information, but it’s a lot to sort through.

The encouraging information is that most folks seem to be able to raise their scores by 100 points or so within 6 months.  They have accomplished this by opening a secured credit card from various lenders (HBSC seems to be a popular one).  Since I joined a credit union a couple of months ago, I should be eligible to get a secured card through them.  When I joined the CU, I was upfront about my situation, and the folks in the branch were very helpful.  The benefits of the CU’s secured card is that they will not charge me any fees to open the account.  Many companies will offer an initial credit limit of $200 (i.e. you deposit $200 with them), but immediately charge you a $200 in administrative & annual fees.  End result – you’re immediately in debt to them.

I think I need to wait the 60 days after the 341 hearing for the discharge notice (everything is finalized) before I go this route.  I will ask my attorney’s office about this.  I figure the sooner I start, the better off I will be.  I intend to check my credit score on the 1st of each month for gits & shiggles to track my progress, and will post the scores as I go along.  Yay me.