Being through a bankruptcy is indeed, a stressful experience but that it doesn’t have to be the end. There are some steps that can be done to help you bounce back from this situation. Applying for an auto loan after bankruptcy is one way to rebuild your damaged credit. In this article, we’ll be discussing the steps you should take on getting a bad credit car loan after bankruptcy and how to get approved more easily.
Recheck your credit report.
Even with a record of bankruptcy reflected in your credit report, you should make sure that there are no unnecessary details that can bring more damage to your rating. For instance, check if there are still unclosed accounts in your report. It will also help if you add a note in your credit report explaining why you had to file for bankruptcy. If the reason for your bankruptcy is a situation beyond your control, such as unexpected loss of job, divorce, illness, or family emergencies, future lenders will be more likely to understand your situation and give the approval you need. Nevertheless, don’t put in lies or false information just to justify your bankruptcy. Lying will only ruin your credibility.
Make sure that you’re ready for a car loan.
Ask yourself, are you ready for a car loan? Getting a car loan means getting into a new financial obligation and this time, you can’t afford to be untimely with your payments. Thus, set your plans well. For instance, decide how much monthly payment you can set aside for your car loan. What is the best loan term for you? It is easy to choose a car to your liking but don’t forget to consider your budget. Be realistic. Right now, the most important thing is for you to build-up your credit and have a car that you can use. It may be necessary for you to make some sacrifices with your lifestyle in order to keep up with your loan, but these sacrifices are certainly worth taking if it means improving your damaged credit reputation.
Get help from a car loan lender.
Car loan lenders will be able to help you find the financing you need even with a record of bankruptcy. Car loan lenders have partnerships with car dealers and other lenders that specially cater to people with bankruptcy and bad credit history. As a reminder, be wise and do your research before working with your chosen car loan lender.
Explain Your Situation
See to it that you car loan lender understands the situation that lead you to bankruptcy. Also, don’t forget to explain the steps you’ve already taken to improve your finances as well as your resolution plan to bounce back from your financial situation. If your lender can see some improvements with your credit in the past few months after your bankruptcy, you’ll have more chances of getting approved. The most important thing for your lender to see is your sense of responsibility despite the difficulties in your situation.