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Get-approved-for-a-car-loan-after-a-bankruptcy By Jason-Lancaster Filing for bankruptcy, while often a good idea, is usually considered "financial suicide". In fact, a lot of people believe that bankruptcy will lead to 7 years of bad credit and embarrassment. Some even think that they'll never be able to buy on credit again.
These warnings are FALSE.
If your bankruptcy is now complete, you can re-establish your credit in one year. By using the credit system you can fix your credit and restore your credit score quickly and easily.
1. Get it together.
It's important to have a budget and a savings plan before you start re-establishing. You have to have savings to get re-established quickly, and you'll need discipline to follow a budget and save. When you come up with a plan make sure you follow it. Also, creditors will probably send you bills for debt that was included in your bankruptcy. Make sure you take the time to inform these creditors their debt was included and provide them proof. If these creditors accidentally file a collection against you it can really slow you down.
2. Save Save Save!
You'll need to save as much cash as possible as quickly as possible. You need cash to get a secured credit card, for a vehicle down payment, and also for an emergency fund. You also need to hoard all of your financial documents. That means your bankruptcy paperwork, your bank statements, pay stubs, and all of your bills. Keep them organized and in a safe place because future creditors may ask for copies.
3. Get a secured credit card.
Once you're able to save up a little bit of cash it's time to get a secured credit card. Secured credit cards are credit cards secured by a cash deposit, with the amount of your deposit being the amount of available credit. The key to these cards is to use them only once and then destroy them. When your first bill comes, pay the card in full. By doing this you'll trick the credit reporting agencies into giving you credit for making payments in full every month, even though you've only used the card once. By destroying the card, you make sure your balance stays at zero.
4. Buy an inexpensive pre-owned car.
I know that the idea of
buying a cheap used car (2-4 years old, less than $10k) may not get your motor running, but remember the goal here is to re-establish quickly. You want to make a few payments on this car (6 to 12) and then trade it in for something nicer. Just make sure you have a down payment before you go shopping.
5. Apply for more credit.
Now that you have a secured credit card and a car loan that you've been making payments on, you have enough credit to get some low limit national credit cards (like Discover, Visa, MasterCard). Make certain that the cards you apply for do not have an annual fee, and you should also look into getting a credit card from your local credit union. Whatever you do, remember that if your application is denied you need to call and ask WHY. Often times you can convince a credit card company to approve a declined application with a little persistence.
6. Get the car you like.
The end is here. You've done everything right, a year has passed since your bankruptcy discharged, and your credit is now re-established. You can get the car you want.
With all of these steps, it’s important to remember a couple of things. First, save money every month. Saving money is a life skill that everyone should have. Second, remember what caused your bankruptcy and don’t let it happen again. Use a budget, avoid impulse purchases, and make sure that you can pay all of your bills even if a major catastrophe occurs.
About the author: Jason Lancaster has nearly 10 years of knowledge & experience in the auto industry. He's helped hundreds of people get a car loan after bankruptcy and has knowledge & experience working with creditors for bankruptcy car loans. Feel free to grab a unique version of this article from the Uber bankruptcy car loans article directory
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