Get Out of Debt Guy

Why is My Credit Score Low?

Posted February 21, 2014

WRAL Reader Question

Dear Steve,

I filed chapter 7 bankruptcy about 14 months ago and would like to apply for a FHA mortgage next year after the two year waiting period is up. I had a on the job injury in which I was sidelined for 9 months, when I recovered I was terminated from my job. I have since had a stable job for 1 year on salary and by the time I apply for the loan I will be around 2 years at my current job.

I am wondering what I can do to boost my credit score. I follow my score on credit karma and after my bankruptcy it showed a credit score of 530. Its now at a 570.

I have 2 unsecured credit cards that I have been paying on religiously for 7 months. I also have a new car loan that I just started paying on for 3 months. My score is not really going up at all the last 3 months and has in fact dropped 2 points.

I do have 10,000 in student loans but those are on hold for right now and should not be effecting my credit score since no payments are late, correct?

Also I have talked to a couple lenders ( I only let one pull my credit) and all of them keep saying my score should be much higher but are unsure why it is not. my credit cards have about 1500 credit line and I have about 500 on them. Can you shed some light on what I can do to boost my credit score.


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Dear Matt,

There are a couple of key areas I would suggest you look into.

While is a good free service that let's you monitor your credit report, they only monitor one of the three major credit bureaus. It's possible there is some error just on that report that is artificially driving your score down.

After you login to your account, look for the My Credit Report Card section and it will tell you exactly what is driving your credit score down.

Just because you have two unsecured cards hopefully they are major credit cards like a Visa, MasterCard, etc. They also need to report to all the credit bureaus for you to get the benefit of having them.

Since I don't know what your income is we also need to consider that your total debt, including the student loans, might be impacting your debt to income ratio and that could drive down the score.

One common issue following bankruptcy is that some of the accounts included in your bankruptcy are not being reported correctly. This seems to be especially true of any accounts that were in collections. The collection companies seem to be notoriously lazy about reporting the accounts accurately. So rather than showing the debt was discharged in bankruptcy, one or more accounts, might be reporting open and still in collection. That can hold your score back.

You might just want to read my guide on how to rebuild your credit after bankruptcy to help you through this process.

The three approaches I would take are to first spend some time looking at all three of your major credit reports. You can get a free copy at Follow the individual dispute processes to correct any incorrect information.

I'd suggest you use that free My Credit Report Card tool from

After doing all of that I'd find a mortgage broker you like and will work with. Let them pull your credit report and review it for their loan products. The mortgage broker wants you to get the loan so they can earn their commission. They'll be motivated to help solve any final issues.


Steve Rhode
WRAL Get Out of Debt Guy

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About this Blog:

Steve Rhode has had careers in opthalmology, real estate and as the head of a nonprofit debt counseling firm. On his blog, he offers hard-won, free advice about getting out of debt, consolidation and making the right choices as you manage your money.