It’s usually difficult to get approved for credit after bankruptcy in Mississippi, and this applies to an auto loan as well. Most lenders check your credit reports before approving you for any loan. Unfortunately, bankruptcy stays in credit history for up to ten years. Although bankruptcy can offer you a fresh financial start, the record of it will still have implications. However, there are strategies you can pursue to qualify for an auto loan after bankruptcy.
Get your credit reports
Reviewing your credit reports following your bankruptcy may seem painful to you, but any lender will still require them. Therefore, it’s essential that you review them and try locating any mistakes. When you do find errors, you can contact the credit reporting agencies to get these changed. There may even be some good news in those reports. Some people retain their vehicle in a bankruptcy. Perhaps you were one of them. If most of your liquidated debt was in credit cards and you never missed a car payment, this is an argument that might help sway a lender in your favor.
Save for the down payment
In most cases, bankruptcy improves cash flow and allows you to save more money. Some of these additional funds should be put aside to accumulate enough for a down payment on the car. A larger down payment means less risk for the lender and a better chance of getting your loan approved.
Do some shopping
If you’re serious about getting a new car, you’ll have to do some research. Shopping for the loan is just as important as shopping for the car. Compare terms and interest rates available to you in your situation. If you can get preapproved, it would be ideal. This will essentially tell you how much of a loan you can obtain and at what rates. Be very careful to review the details of the contract to avoid excessive interest or other charges. You don’t want to start your new credit history at a disadvantage. You may even wish to consult an attorney before making the commitment.