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Update: Operation Rebuild Credit


So I realized it’s been awhile since I talked about the state of my credit. Partially because it still sucks, but also because I hate the judgment that always follows. Nonetheless, if I’m going to have a blog about getting out of debt, I’ve got to talk about my debt at some point, right?

As it stands right now, I still have ZERO credit card debt. Next month will mark 1 year since I paid off the last one! I’ve had to use credit a few times since I quit my job, but I busted butt until I could pay the balances in full. Still, I have a long way to go before things are where I’d like them to be.

A Snapshot of My Credit

For those of you who are new to the party, this is what’s up with my credit as of right now:

  • Chapter 7 bankruptcy in 2006
  • About 25 (!) pre-bankruptcy credit cards showing 90+ days late AND included in bankruptcy (thanks to me listening to my attorney, who told me to stop making the payments) – these should start falling off in 2013
  • 1 charge-off from a car I wrecked (long story)
  • Car loan (I owe $8488)
  • Student loans (I owe about $41,000) – these are currently deferred
  • $3400 in available credit spread across 5 credit cards – zero balances on all cards (yep, it takes a LONG time before creditors trust you with decent limits again!)
  • 100% of post-bankruptcy payments made on time

Yes, it’s ugly, except for those last two. Thanks for noticing! Hence my reluctance to think/talk/post about the situation.

The Plan

My priority right now is rebuilding the credit I destroyed, which is a long and painful process. I’m focusing on the following:

1. Reducing debt, not adding to it. I rotate use of my cards every few months for a random purchase, usually something like gas, then immediately pay it off. I want to keep my cards active, but not go back to carrying balances that I can’t pay. I also apply for credit line increases every few months (depending on how often the creditor will grant them) because higher limits mean a lower ratio of debt to available credit.

2. Spending only the money I have. I used to be really bad about spending money before I got it. Like if I knew I was supposed to get a check for $100, I would spend $100 ahead of time. Then when I got the $100 (assuming it actually came), I’d spend that, too. Right now I’m saving for a laptop because I need it for work. I know I have enough money coming in to buy it this month, so I could, theoretically, use a credit card and pay it off at the end of the month. But because the money is not actually in my hands, I’m waiting.

3. Keeping an eye on my credit report. You can get a free (actually free) credit report once a year from each of the 3 credit bureaus by going to It’s the ONLY legit place to get it for free, so don’t fall for scams. Anyway, I have my phone set to remind me to get one of the 3 reports every four months. That way I can check for inaccuracies (there are usually a lot after bankruptcy) and make sure there’s nothing weird or fraudulent.

4. Following self-imposed spending rules. If I want something that isn’t necessary and/or costs more than $50, I have to wait 30 days to make sure I really want it. I use a decision tree to determine whether or not to buy something. I only carry one credit card in my wallet. I don’t go to malls or clothing/shoe stores without a darn good reason. Does it seem like overkill? Maybe for some people, but I know myself well enough to know that I need these safeguards.

The Outlook

Right now there really isn’t much progress from when I started this blog in February 2011, other than the fact that my credit cards are paid off and I’ve paid down $4000 of my car loan balance. Don’t ever think that bankruptcy doesn’t hurt your credit, because it OBLITERATES it. I am nearly 7 years out and the oldest negative item will fall off next April. The bankruptcy itself will be there until August 2016.

Despite all that, I still feel somewhat optimistic when I look at where I am. First of all, I’ve finally made real behavioral changes (the type I should have made before filing for Chapter 7) that affect the way I look at spending and debt. Second, I shouldn’t need to use credit anytime soon, so my horrible credit scores aren’t holding me back (knock on wood) and I can use these years to further develop good financial habits. By the time I have decent credit again, I’ll be able to use it wisely. Finally, I know that if I’m ever in this situation in the future, it will be because of some major catastrophe and not because of stupid decisions on my part.

Operation Rebuild Credit status? As good as it can be right now.

About Andrea Whitmer

Andrea is a freelance web developer and mom trying to maintain a sense of humor in an otherwise chaotic world. She blogs in hopes of helping others avoid the same mistakes she made in the past. Join in the discussion here on So Over This, or connect on Twitter, Pinterest, Instagram, or Google Plus. You can also subscribe to new posts via RSS so you never miss out!


  1. I don't know why you are worried about judgement. I think this looks great! No, it's not perfect, but I don't know many people out there who have perfect credit histories for their entire lives. I think what is important is that you are doing the best you can with your situation. No one can blame you or get mad at you for that. Keep up the hard work, and it will all pay off in the end!

  2. It is a long slow road to rebuild your credit but it looks like you are doing it right. Keep it up!

  3. I think it's great you're sticking to your plan! I recently got married and we just got serious about getting out of debt. Right now we can only afford to make the minimum payments (my husband was out of work for a few months b/c we moved to a new city for my job/grad school, he got a great job a few weeks ago though!) and we're concentrating on not adding anymore to our debt. Once we have more income coming in we can work on paying more towards those debts. Thank you for the reminder about credit reports, I think we should both do that soon just to see where we are!

  4. Wonderful post!

    Congratulations on #2 – I think that is one of the hardest changes to make when you get yourself out of debt. I am like you, I would spend money before it came, charge things that I "promised" myself I would pay off immediately. Even though you still have your student loans and your car loan, I hope you are proud of the hard work you have done in order to get out of credit card debt and change your bad behaviors. Thanks for the update!

  5. Wow! You're doing a great job! In one year, when your CCs fall off your report your score will boost and then it'll only be a little while until your bankkruptcy is discharged. Aside from maybe needing to buy a new car one day, what do you really need credit for anyways? You have your house and you're committed to not having CC debt anymore so $3400 seems like more than enough credit for right now

  6. Budget & the Beach says:

    Good luck with your goals. I need a better plan of action myself with impulse buys. I guess some people eat their emotions…I spend mine. ugh!

  7. Great job improving your situation! You've made the major changes, now you just have to keep on chugging! Keep up the great work!

  8. Give yourself some credit, Andrea! (no pun intended) While you may feel as though you haven't made much progress in the year since you paid off your last credit card, you have. As your bankruptcy and 90 day delinquencies continue to age, they have less impact on your credit score. By paying all of your debt obligations on time since the bankruptcy, you are building (albeit slowly) a positive credit history. As you well know, changing your financial behavior and your subsequent credit worthiness, takes time.

    Congratulations on making the changes necessary so your money no longer has control over your life!

  9. No criticism here, just congratulations!

  10. seedebtrun says:

    Sounds like you're doing everything right now. Sure, filing for bankruptcy sucked, but anyone who would judge you for that clearly hasn't walked a mile in your shoes. You have a supportive group of folks in the stands who are cheering you on. Not spending money before you have it has been a struggle of ours in the past as well. This year, when Jeff got a raise, we didn't rush out and start spending it all! We still have a ways to go on our debt reduction and it would be completely irresponsible for us to forget what's important now.

  11. I can't wait until I can say my CC debt is 0 !!! Workin' on it. I am very curious about your student loan debt however, partly because it is such a hot topic these days. Are you paying the interest at all? I too have loans in deferment on a lower balance but as of right now I feel like I will never have an income to properly address these. Most months I have trouble putting food on the table, I don't see where I can even come up with the minimum…….you've probably written about this already (sorry) just curious.

    • I'm not even touching the loans right now. They don't accrue interest while they're deferred, so I'm just delaying repayment as long as possible. My minimum payment is supposed to be $483 a month. There is JUST NO WAY.

      • What type of loans do you have, as far as I can tell with mine, I could defer it but the only way to avoid interest is if it's an in-school defferment. If the regular minimums are too much you can usually go with income based repayment if they're federal loans. Also interesting fact, it's not that the loans don't get charged interest in the time, it's that the government pays the interest for you.

        • Subsidized Stafford loans don't accrue interest in deferment. I think you're thinking of unsubsidized Stafford loans, where the interest accrues but the government pays during deferment.

  12. Teinegurl says:

    i have a question: what do you know now that you wished you would have know then or be able to tell yourself?? I'm also in the process of rebuilding my credit. I have no credit cards right now but once i see those offers it's so tempting ( i called so i could be taken of mailing lists) i rip it up and throw it away. So what's the next step?

    • Are you talking about before I filed bankruptcy, or before I charged up the new credit cards after bankruptcy?

  13. Congrats on the progress! At this point it seems to be a waiting game. It is awesome that you won't allow yourself to buy anything until you have the cash in hand. That is so important and keeps you from slipping back.

  14. You had to start somewhere but you've come a long way. Just stick with it andf you'll be in great shape before you know it.

  15. You can’t change what you did in the past, you can only learn from it. You’re making good progress! Over time the bad marks will go away. I’m impressed with how drastically you’ve changed your spending behaviors, not everyone has that much discipline!

  16. This is actually quite impressive. I've been reading your blog for a while of course, but I didn't know all these details. The reality that you had such a bad siuation, and have turned around your behavior so well is fantastic. It's a real success story that can help give others hope, I would think!

  17. I'm excited your 7 year anniversary is almost here! Where do you think your credit score will return to after 7 years?

    How much do you think you end up saving by going through this process?


    • I don't expect to see a big difference since the bankruptcy will still be on my credit report until the 10-year mark. I'm around 640 on all 3 bureaus now, and I'm sure it won't improve much before 2016. 🙁

      I don't even know how I could estimate what I've saved as far as the overall changes in the way I deal with money. Probably a good $2k a year in bank fees since 2010. No telling how much I would owe in CC debt if things hadn't changed – I had $6200 in CC debt when I got divorced in 2009. My parents were writing off about $6k a year on their taxes for "gifts" (AKA digging me out of holes). Then there are the differences in my spending/saving habits, the number of times my e-fund kept me from using a CC, the escape from my ex-husband's payday loan addiction (but also the loss of his income)… A lot of factors at work, but I'd say the amount would probably knock my socks off if I could find a way to calculate it!

      • That's the thing. To look at the positive side of bankruptcy, figure out a rough calculation of savings due to the process. It will help counteract all the pain during the process!

        640 doesn't sound bad at all, it really doesn't. OK, 4 more years ain't too long!

      • What do you mean when you say "My parents were writing off about $6k a year on their taxes for "gifts" "? I was under the impression that gifting money (to a non-charity) was not tax deductible, in fact if you gifted over $13k to a person you'd end up owing more taxes. Or were they able to funnel the assistence through a business and write it off a losses/expenses?

        • That's why "gifts" was in quotes – I consider them gifts because I wouldn't have survived without the help at the time. I was trying not to go into too much detail about my parents' finances. The deductions were taken legally and under the advice of their accountant.

      • 640 is impressive compared to mine. I just filed ch. 7 last summer and my score has stayed about the same, floating around 570.

  18. It's good you have a plan though. Most people don't have one.

  19. Glad you are on the road to recovery! Sorry it takes learning from experience sometimes…it sucks, but you now know how to avoid debt in the future. 🙂

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