Car Loans after Bankruptcy in Waterdown are Still Possible
Car Loans after Bankruptcy in Waterdown are Still Possible
Posted on March 23, 2022
Canadians looking for car loans after bankruptcy in Waterdown have a series of unique challenges they will need to overcome. Fortunately, our auto loans team is here to help.
First, were you discharged from bankruptcy or still waiting for your bankruptcy trustee, also referred to as an insolvency trustee.
If you do not have the discharge from bankruptcy, then you cannot open up any new lines of credit, so make sure you get this settled right away.
The easiest way to rebuild your credit post-bankruptcy
Bankruptcy can give you a new financial lease on life, starting with a clean slate.
While you do have a clean slate, your credit score will be low, and the bankruptcy will stay on your credit report for at least seven (7) years.
You will need to start rebuilding your credit score; no creditor is going to approve you for a new credit card or any other type of credit.
So, the only option is signing up for credit rebuilding products like a secured card; these cards work just like a conventional credit card, but you need to deposit money which works as your credit limit; with each dollar you deposit, your credit limit increases by that amount.
We recommend putting at least $1,000 into your secured credit card and, if possible, applying for a few cards, so your credit score stands a higher chance of rebounding.
How are credit scores calculated?
There are a few variables that go into the calculation of your credit score. Your repayment history plays the biggest role in your score; the longer you have been paying your debts on time, the higher your score.
Since you were just discharged from bankruptcy, your repayment history is fairly new.
Another variable that goes into the calculation of your credit score is your credit utilization; the less debt you carry, the faster your credit score will increase.
Therefore, if you focus on both of these elements, your credit score should begin to improve quickly.
Work on defining your budget
While you were going through your bankruptcy, the trustee would have you enroll in classes to learn to budget. For example, do you have room in your budget to cover the costs that are associated with a new car?
The average new car payment ranges from $400-$800 depending on the vehicle; with car prices rising by the day, you need to have enough room to cover all of the costs, including gas.
Where to find Car Loans after Bankruptcy in Waterdown
Most creditors will turn you down, but there are lenders who will offer you a car loan. The only way to access these lenders is by working with a dealership.
These dealerships will be able to discuss your file with their network of lenders and pick the one who has the best deal. In addition, the dealership will show you how to rebuild your credit and what vehicle is best suited for you.
When you take the dealership route, you are going to have access to the best deals and cars, but you need to start exploring all of your options.
We’d love to help you find great options for car loans after bankruptcy in Waterdown. Simply fill in the form below and we’ll get back to you ASAP or see our selection of new and used cars at our Burlington dealership.
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