Doug's Credit Center Blog

Auto Financing for Recently Discharged Bankruptcy

Posted on by Andrew

After spending the last several years or decades of your life paying off bankruptcy, you are finally free from this situation. Now, you are on to reaching some of your other goals, and one of them is to purchase a vehicle. When it comes to auto financing for recently discharged bankruptcy, what do you need to know?

Your Credit Score

Now, your credit score could be in a couple of different places depending on the length of the bankruptcy and other factors. Your score might still be really low, or you could have no recent credit history. Generally, when you’re going through bankruptcy, you are not allowed to take out any lines of credit. Your credit score could affect your eligibility for a loan, so be sure to factor this in.

Having a Co-Signer

With car financing with an open bankruptcy, realize that you are a financial risk for the dealership or lender, so you might be best off to choose a co-signer to help you out with the scenario. When you have a co-signer, this person is going to be responsible for making the payments if you suddenly stop making them. Therefore, you need to ask someone who really trusts you, especially if you are just getting out of bankruptcy.

A Chance at Last

Having bankruptcy hanging over your head is a huge problem, but now you are finally free of those chains. On top of that, you have the opportunity to start working toward repairing your credit. Since you have this loan out, you want to make sure that you are always paying it back in full and on time. Getting yourself into another awful financial situation is not what you need right now, and paying it off can help to put you back into the graces of loan lenders.

Yes, bankruptcy is a difficult situation, but it does not have to mean that all financial happenings in your life come to a halt. Of course, keep these tips in mind.

  • Look at your current credit score and consider its possible effect.
  • Think about asking someone to co-sign on the loan for you to get better rates and a better chance of getting a car loan even with bad credit.
  • Realize that this is an opportunity to make a difference in your life.

Truly, having the chance to restore your financial situation is not one that all people get, so be sure to take advantage of it.

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