Filing for bankruptcy is one of the most difficult financial decisions you can ever make. Although it has the ability to help you get out from underneath an unmanageable level of debt which is weighing you down there are also long term effects to consider, most notably the effect it will have on your credit score. This can make it difficult to open up new lines of credit like cards or loans.
If you have already gone through a bankruptcy or are considering the process but are worried about how it will change your ability to purchase a car there is good news. While the bankruptcy will have an impact on your credit score, it is no longer a complete deal breaker to have a bankruptcy in your credit history.
Speak With an Attorney
If you’re still unsure about filing for bankruptcy then you should seek out professional assistance. Speaking with a bankruptcy attorney in a consultation can help you to discover what the best option for you is in order to make sure that you aren’t making a mistake.
Monitor Your Credit
Just because a bankruptcy makes your credit score take a big hit doesn’t mean you can simply write it off as a lost cause in the short term. If you continue to neglect your credit following your bankruptcy it will only get worse and leave you in an even worse position when it comes to financing the vehicle you need. Take advantage of free credit monitoring options including your annual free credit report to make sure that everything else on your report is correct and you are not taking negative hits incorrectly.
Get to Work Repairing
Once you are certain that your credit report is only providing accurate information it’s time to start making sure that everything which is being reported presents as positive a picture of you as possible. That means it’s important to stay on top of all of your active accounts to make sure that you are using them wisely. Making payments on time consistently allows you to develop a track record of responsible borrowing which will increase your chances of a good car loan. You should also work to pay down any existing balances on your credit accounts in order to lower your credit utilization percentage.
Keep Your Goals Modest
When purchasing a car following a bankruptcy it is important to keep your targets realistic. If possible, choosing a car which you can afford to buy in cash means you don’t have to worry about financing. However, most consumers need to seek out a loan. It is important to remember that the more expensive your potential purchase is the harder it will be to get a loan, and the more likely it is that any loan you qualify for will have less favorable terms. By targeting a reasonable purchase you make your chances of success go up.
If you’re trying to get a car after bankruptcy you may not be fortunate enough to find the right lender for you on your very first try. The solution is not to give up, however. Look around, visiting multiple dealerships and working with multiple lenders if possible. The more people you speak with about your car loan the more likely you are to have a positive experience and get the right loan opportunity for your situation.
If you need a car then you don’t need to let your prior bankruptcy get in your way. While the process will be more challenging for you that doesn’t mean you can’t still find the right car for you at the end of your search.