How to Get a Truck When You File Bankruptcy

Financing a truck after bankruptcy

Bankruptcy can result in a feeling that you're not worthy of credit. This is, however, not true. While bankruptcy issues a resounding blast to your credit file, you can learn from your mistakes and march to a good financial future. Shake off the feeling that you are a loser and resolve to make good decisions and handle your finances well from this point on. Your very first step to rebuilding your financial future is to obtain credit and handle that credit well. If you begin to rebuild immediately following discharge, you can qualify for a truck loan six months after discharge.

Instructions

1. Apply for a secured credit card immediately following your discharge. Research secured cards carefully. Send in your deposit to establish your card and do not miss one payment. Handle this credit account with perfection. If possible, apply for two secured credit cards.

2. Wait six months and pull your credit report with credit score. Once the secured card has reported six on-time payments, you will see a nice jump in your credit score. Make sure the card company has reported your sixth payment. If not, wait until they report the sixth payment before proceeding.

3. Visit your bank or credit union and meet with a loan representative. Ask if they will consider financing a vehicle loan with a bankruptcy. Lenders are, surprisingly, willing to lend after bankruptcy as they know you can't file again for many years. Additionally, by showing you are already repaying debt in a positive manner, they are even more willing to loan.

4. Apply for an auto loan. Be prepared to show proof of income and know the amount of money you can put down as a down payment.

5. Proceed to the dealership and apply for a loan with them as well. Chances are your bank will have the better offer but if the bank decides not to loan to you, you will be covered and the dealership may come up with a better offer to compete with the bank. Be prepared to pay a higher interest rate because of your previous bankruptcy.

6. Make all payments on the loan on time. After six months of paying your vehicle loan on time, pull your credit report again and review your credit score. You are now one year past bankruptcy and have established a good payment history on both revolving and installment loans. Visit your bank to review the possibility of refinancing the loan to a lower interest rate.

Tips & Warnings

• Do not be in such a hurry to reestablish credit that you fail to make smart choices. Buy a truck that you can easily afford.

• You can apply for a loan in multiple places within a 14-day period and only have one credit inquiry ding to your score.

References

• Money Central: Bounce Back After Bankruptcy
• Bankruptcy Lawyers: Getting Credit After Bankruptcy
• Business Week: Getting Credit After Bankruptcy

Resources

• Come Back Credit: Secured Credit Cards