Buying a car after bankruptcy may seem like an impossible feat, but
it’s not. While having a bankruptcy on your credit report can make it
tougher to get approved for financing, there are still ways you can
get credit approval to purchase a vehicle. But first, let’s take a
look at how bankruptcy can impact your credit history.
How does bankruptcy impact my credit history?
There are two types of bankruptcy you can file as an individual:
Chapter 7 and Chapter 13. With Chapter 7 bankruptcy, some of your
possessions and property can be liquidated to repay outstanding debts
(and certain debts may be discharged altogether). In a Chapter 13
bankruptcy, you set a plan with the court that allows you to repay all
or part of your debt within three to five years.
According to credit reporting companies Equifax and Transunion, a
bankruptcy can stay on your credit report for seven to 10 years. The
good news is the impact should lessen over time.
How can I get approved for financing to purchase a vehicle after bankruptcy?
Before car shopping, determine what you can afford. Putting together a budget and savings plan is a good way to
determine how much car you can afford. You can do this by reviewing
your current expenses and calculating how much you already have or
need to save for purchasing a vehicle. When determining what you can
afford for your monthly payment, it’s also a good idea to include
car insurance and maintenance costs to help avoid surprise costs.
Find a car dealer that will work with you. It’s important to find a car dealer that can offer you a car
loan or auto financing for your credit situation. There are many
dealerships that offer subprime auto financing to credit-challenged
car buyers in need of credit approval to purchase a vehicle. Credit
Acceptance works with a network of more than 12,000 enrolled dealers
across the United States that can offer credit approval on reliable
new and used vehicles to every car buyer.
Work on rebuilding your credit history. After purchasing your vehicle, you can start rebuilding your
credit history by making on-time car payments. Credit Acceptance is
an auto finance company that works with dealers and allows them to
approve credit-challenged car buyers for vehicle financing. Since
Credit Acceptance reports to the three major credit reporting
bureaus, customers can improve their credit history by making
on-time car payments.
If you have a bankruptcy filing in your credit history and are in the
market to purchase a vehicle, a dealer enrolled in the Credit
Acceptance auto finance program can help! Simply fill out the form on our website to get
connected with three enrolled dealers near you that can help you start
your credit approval today!