Trying to get a bankruptcy car loan and having difficulty? When we have a bankruptcy in our credit history, it seems almost impossible to ever get a car loan – much less one with decent terms. But this does not always have to be the case. You should remember that when you get a new loan of any sort – especially a car loan – it will help you to begin building and reestablishing your credit once again, and also your credit history.
Many of these finance companies today will not talk to you when you are in the middle of filing a bankruptcy, but you will be amazed how their attitudes toward you change after the process is complete. The reason is that in many cases, you are once again able to take on some debt and start building your credit again. Bad credit does not always mean no credit at all. Believe it or not, you can still find yourself a decent bankruptcy car loan with a lower than you think payment and at a decent interest rate. But this will take some work on your part. Let us examine a few great pointers and tips that will greatly help you in finding the best terms possible in spite of your poor credit history.
Get your Credit Report
The first vital step to your credit recovery is getting a copy of your credit report so that you can address actual issues with your credit. Obviously, there are will some not so great information in there – some of it you may find derogatory and insulting. Ignore the stuff that may be upsetting, your goal here is to make sure the information is accurate and correct. Believe it or not, most credit reports have a few errors in them. The question is whether or not those errors are of the rinky-dink variety or are they having a major impact on your credit.
Your job here is to find these errors and get them cleaned up. Even though you filed a bankruptcy, you still have rights. And of those is having the credit agencies accurately reflect your credit history – good or bad. The types of potential errors are things like having information about an old loan reported twice – making it look as if you had two loans, when you only had one – this is quite common actually. If this loan was one that you default on as a result of your bankruptcy, then it makes things look worse than they really are.
Another common mistake is where they list loans that you never ever had. Obviously, the information belongs on someone else’s credit report, but it wound up on yours. After finding all the errors on your credit report, then you need to report that and get them corrected. Give them a reasonable amount of time to make the corrections – they will not move as fast as you would like for them to move. After a few months, get a fresh copy of your credit report and see which corrections were made. Then you should send them another request to correct the remaining errors on your report. And then check it again after a few months, and so forth. Keep doing this until your credit report is correct.
Now you can address the legalities of your bankruptcy and start focusing on getting a bankruptcy car loan. Since you filed a bankruptcy, it will obviously be in your credit history. But by law, derogatory credit history can only stay on your record for a limited period of time – typically 10 years. You should know that there are several collection companies and various creditors that will abuse the laws by relisting bad loans using completely different loan numbers from the originals. They are simply trying to burn you for defaulting on them.
Putting Bad Lenders in Their Places
This is why you need to keep checking your credit report from time to time because this practice is highly illegal and a blatant violation of the Fair Debt Reporting Act. If conditions warrant, you are always free to get yourself a lawyer and go after some of these lenders who keep violating your rights. At the very least, you can report them.
Just keep in mind that any info that does not belong on your credit report could be thoroughly investigated when you inquire using one or more of the credit bureaus (Trans Union, Equifax and Experian). Whenever inquiries are opened, they have to get in touch with the original lender and get proof from them that debt information is legit. If they receive no proof within a month, then the questionable information is removed.
After that, the affected credit bureau will send you a credit file that has been totally corrected – free of charge. However, be warned that using this dispute process should not ever be abused for reporting debts that are knowingly valid. You definitely do not want their wrath turned on you.
Submit Explanations Where Applicable
Not that the information on your credit report is correct, you are free to begin improving your credit score. Also keep in mind that every person is entitled to make explanatory entries for addressing any derogatory information that is valid. For example, you could have gone through a personal catastrophe such as a horrible illness, a house fire, or a car wreck with an un-insured drive that caused you great financial difficulties – things which were unavoidable. It is urged that you do this if you have a legitimate and valid explanation, because creditors will indeed consider this – especially if your credit was good up until the unfortunate event.
Hopefully, you are beginning to see that finding a decent bankruptcy car loan is not as hard as you probably thought.
Work on Building Relationships with People Who Can Help
One of the best things you can do is start talking to and building a relationship with loan manager in your bank or a local lending institution. Be honest with them about your situation and ask them for advice in securing a low interest car loan with them in the near future. Take responsibility for your poor credit and find out what steps you can start taking now. People in every walk of life love to give advice, so if your attitude is right, then she or he will be delighted to help you.
Get their opinion on re-building your credit history. Who knows, maybe they could give you a small personal loan that you can easily pay today which will serve to “dress up” your credit score. If need be, open an account of some sort with their company – if you haven’t done so already. You probably have no clue at all as to how much good will you are sowing by doing this.
As time goes on, they will become more and more familiar with your needs and your situation. And then one day, perhaps a new type of federally funded second change low interest car loan becomes available and your banker friend remembers you and thinks you’d be perfect for it – as you need a second chance bankruptcy car loan. The next thing you know, you have a new car and are beginning to rebuild your credit history – all because you started building that relationship with a local lender. This is how life works, my friend.
Always Do Some Research Before Signing Anything
This is very important – especially these days. Online car loans and the like have made getting loans so quick and easy that you really have to slow down sometimes. Do not get caught up in the moment and forget to check a few things out before you commit – this is just good business. It is never a bad idea to sleep on a decision before making it permanent.
There are just too many bad apples out there willing to rip you off or give you horrible terms. When you really need that bankruptcy car loan, you have to understand that you are vulnerable simply because you need that loan so badly. This will blind your better judgement sometimes and some of these crooked lenders are skilled at taking advantage of that special vulnerability – because all of us in that position would be vulnerable. Just remember that any honest lender would have no problem letting you sleep on it before signing. And the good news is that most lenders are very honest.
So when you finally get that car loan after bankruptcy, you must ensure two things. The first is making sure that you can easily live with the terms of loan. Do not extend yourself by taking on too big of a payment. And the second thing is to make those monthly payments religiously and NEVER let them be late. In fact, you should always make your car payments early.
If you do these two things over a period of 1-2 years, you will be amazed at how fast your credit score improves. Find out more about a bankruptcy car loan: https://www.consumer.ftc.gov/articles/0084-debt-relief-or-bankruptcy