Getting approved for a car loan is an interesting way to rebuild your credit history after a bankruptcy. It is a way to prove to lenders and creditors that you no longer pose a threat and that you are no longer a credit risk. The timely monthly payments of your car loan will help you create a clean credit history free from delinquencies with your bankruptcy as a new start point.
Get Your Credit Report and Know Your Credit Score
Get a free copy of your credit report and analyze it thoroughly. Make sure there are no incorrect entries on your report and if so, have them corrected by disputing them with the credit bureau that issued you the copy. Knowing your credit score is important because you will know where you stand in the eyes of the lenders and will have a best starting situation for negotiating with lenders. Therefore you won’t be tricked into paying higher rates due to a credit score that is not as bad as they say it is.
Getting Familiar With The Lender’s Credit Requirements
Try to contact lenders informally and tell them about your situation before they run any credit checks. Don’t conceal any information as they will get to it sooner or later. Instead be honest and ask them about their requirements for approval and how you can qualify, whether you need a co-signer, a down payment, etc. With this information you can compare and know beforehand with which lenders you have more chances of getting approved for the car loan that you seek.
Leasing And Buying
It is possible that some lenders will propose to you to provide you with financing if you successfully complete a leasing contract for a certain period of time. This may turn out to be expensive in the long run but the monthly installments will be affordable and your credit situation will improve with time. This is a way for lenders to make sure that you stand up to your word and honor your obligations even if your credit report shows a bankruptcy on your credit history.
Dealerships and Manufacturers Might Be Your Best Chance
As opposed to lenders who make their money out of financing, manufacturers and dealerships make money out of the actual sell of the vehicle. Therefore, sometimes they need to sell certain amount of vehicles to close their budgets. When they need to reach a certain amount of sells, they are compelled to sell no matter what and thus, they offer financing with less requirements than usual.
This doesn’t mean that you can’t contact banks, lenders and other financial institutions but beware of certain sub-prime lenders that might want to overcharge you taking advantage of the fact that you had a past bankruptcy and you are in a more needy situation than most applicants. Remember that high monthly payments are a threat to your budget and can lead to defaulting again on your debts.
Jessica Peterson writes finance articles for Yourloanservices.com where she shares her knowledge about how to get money for a starting-up business, consolidating any kind of debt, repairing a home even with a bad credit history and more.
Source: http://ezinearticles.com/?expert=Jess_Peterson