One of the best ways to improve your credit after filing bankruptcy is to get a car loan and make your payments on time. A paid-as-agreed auto loan after bankruptcy will raise your low credit score and get you back into the credit world. If you are currently in the middle of a bankruptcy or recently discharged, it doesn't mean you can't get auto financing. If you meet the minimum requirements, don't wait any longer. Waiting will not help you rebuild your credit!
Improve Credit Score
The credit scores of consumers who received a subprime auto loan increased over the three-year period with a median improvement of 52 points. This is a 62.5% improvement over the group that did not take out an auto loan, who only improved by 32 points. Even more telling, those that took out an auto loan were four times more likely to have improved their score above 640 compared to the consumers who did not take out a loan.
Source: Equifax Data Dec. 2014
Many dealers out there say they can help someone with bankruptcy, however, do not have the inventory or the lenders that will give you the best financing terms available. This could land you with huge interest rates, big monthly payments and especially a car you might not like. Don't get stuck with a bad auto loan.
Let our Fresh Start team help you get the right financing. We have developed relationships with many lenders who specialize in providing auto loans across the U.S. that are eager to earn your business and help you get back into the credit world.
We have also partnered with dealerships in your area so you can walk in and walk out with a great car buying experience and a new loan.
Type of Bankruptcies
There are two types of personal bankruptcies:
To get an auto loan in an open Chapter 13 bankruptcy, you will have to do some work. There is no such thing as an instant approval or apply today drive today auto lending. First you should check with your trustee or attorney and let them know that you want to buy and finance a car.
Every lender that approves people in open bankruptcies requires an authorization to incur debt. This is a legal document obtained from the bankruptcy trustee. It states what your maximum allowable payment is and that the new loan will not be part of the open bankruptcy.
As long as the new car you plan on purchasing is within your budget, most trustees have no problem approving your request. We recommend that you obtain this document from the courts prior to shopping for your new car. For more information call us we will guide you. 800-795-1765 X6