880 Walkers Line, Burlington, ON, L7N 2G2, Canada

Finding Car Loans After Bankruptcy in Niagara Falls

Finding Car Loans After Bankruptcy in Niagara Falls

Can you get a car loan after bankruptcy? What happens to your credit score? Will anyone lend to you once proceedings have been discharged?

 

We asked our Niagara Falls auto loans team to discuss what happens after bankruptcy and how long it might take until you can get a car loan.

 

Car loans and bankruptcy

 

Bankruptcy is a big deal but it isn’t the end of borrowing. It’s like a fresh start and an opportunity to start over with a new approach. It isn’t for the faint hearted but it’s more common than you might think.

 

We would not encourage you to begin borrowing again immediately after having bankruptcy discharged but if you need a car to get to work, you may not have a choice.

 

Once proceedings are complete, you should be free and clear of all previous debt. Your credit report will have a marker for bankruptcy but all that debt that was hanging over you has now gone.

 

Now is the time to rebuild.

 

Credit scores and bankruptcy

 

As you can imagine, your credit score takes quite a hit from bankruptcy. As your score is a measure of how you manage debt, going through what you have just gone through is going to drop that score.

 

You will likely now have poor credit, but that’s okay as you can begin rebuilding it right away.

 

We recommend checking your credit report with both credit bureaus to get a full picture. Request it from TransUnion and Equifax.

 

Check your report, make sure everything is correct and that relevant accounts are marked as closed or settled. Then check your score.

 

Borrowing after bankruptcy

 

In theory, you can begin borrowing immediately bankruptcy has been discharged but we wouldn’t recommend it.

 

You won’t get good rates and you may find it difficult to find a lender willing to lend enough for an auto loan.

 

We recommend getting a credit card first. If you can qualify for a standard card, get one. If you need a secured credit card, get one.

 

Use it for regular purchases like gas and groceries, set up an automatic payment for the minimum amount but clear the card every month.

 

Do this for 6 months or so and you’ll begin seeing upward movement on your credit score. You’ll also have 6 months positive payment history to show future lenders.

 

Arguably, this part is most important. The intent is to show that bankruptcy was a watershed moment and things are different now. You pay on time, manage your finances and have your life in order.

 

If you can also have your phone, utilities and rent entered onto your credit report, all the better.

 

If you can wait longer so you have more payments and a slightly improved credit score, do so. 6 months is a good number of payments to have but 12 or 18 is better, as it shows a more sustained behaviour change, which will reassure lenders.

 

Depending on your situation, you could apply for a second card and do the same with everyday purchases, automatic payments and clearing the amount each month.

 

Once you’re ready, you can come see us for a Niagara Falls car loan. Our team are experts at helping those with less than perfect credit scores and would be happy to help you too!

 

We will use all our skill and experience to deliver the lowest possible Niagara Falls auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.

 

Thanks for reading. Be sure to connect with us on Facebook, Twitter, Instagram, or LinkedIn to stay up to date on our latest great articles!

Categories: Auto Loan

Tags: ,