Many individuals who have had a bankruptcy discharged automatically assume that they do not qualify for a loan or new credit. However, that’s not necessarily true. You may be able to get new lines of credit after your bankruptcy quicker than those who have several delinquent accounts and missed payments. Although you may not be able to purchase a sparkling new vehicle after your bankruptcy discharge, you will increase your chances of getting an auto loan after bankruptcy if you follow several steps.
Obtain a Copy of Your Credit Report
The first thing that you will want to do if you are trying to get an auto loan after bankruptcy is to get a copy of your credit report. You will want to gather your report from all three of the major credit reporting agencies. There is a chance that all of your accounts have not been updated to show your discharge information. Also, you will want to take the time to go over your credit reports thoroughly. Make sure all of the accounts show accurate information.
A debt that has been discharged by the bankruptcy court should show a balance of zero. And terms such as ‘past due’ should be removed from the account. If you notice any inaccurate or incomplete information on the report, dispute the information immediately. And then request updated information from that lender.
If you have correct information on your credit report, your credit score will slowly begin to improve. Just remember that your credit will improve over time. You should not expect a dramatic increase in a short amount of time.
Choosing To Buy a Vehicle: Getting an Auto Loan after Bankruptcy
There are two ways you can choose to get an auto. The best option is to take the slow and steady way. Find a reliable vehicle, and pay for the car in cash. This will give your credit score time to improve. As a result, you may be able to qualify for new accounts during this time. You will not have to worry about making car payments, and you will be able to start on your emergency fund.
You can also choose to get a secured auto loan. It is possible you may have to deal with some challenges due to your bankruptcy. For example, you may not be able to borrow the amount you want or you may not get the interest rate you are looking for. But, if you are able to pay a secured auto loan off on time, your credit score may get a bigger boost than with unsecured credit lines.
It is not impossible to get an auto loan after bankruptcy. Remember to manage your money well and make your monthly payments on time so you can avoid future financial problems.
Do you want to know how you can financially recover if you decide to file for bankruptcy? Schedule a free consultation with the experienced attorneys at Douglas Jacobson Law Firm.