Re-establish your credit – To rebuild your credit, take out a small personal loan through a loan company that will help you rebuild your credit by reporting your payments to the credit bureau. Make sure you make all your monthly payments on time. Your credit score will eventually increase and when this happens you will get lower interest rates.
Pay Cash – If possible, prior to buying a used car, save up money. You don’t have to buy a fancy new car, it just has to be good and reliable. One way to do this is to make a car payment to yourself for the amount you’re willing to pay for a car. When you have saved enough, you will have a nice chunk of change to pay for a car in full or even a lump sum down payment. This is a great way to save the interest payments.
Review Your Credit Report – This is a great first step after bankruptcy. You need to review your credit report and make sure that all your accounts are in order and there are no errors. All the accounts that were hurt your credit and were included in your bankruptcy should all be closed.
Explain Your Situation – A car loan application may raise questions about your recent bankruptcy. You should explain what led you to this path. This is a great chance to explain yourself and to show that you have taken all actions to correct your financial situation. Also include all important credit improvements that you’ve worked on up until you are applying for the car financing.
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