Getting A Car Loan 7 Years After Bankruptcy

You might think that getting a car loan after having a bankruptcy is a difficult thing to accomplish. However, in many cases, finding a car loan under these circumstances is not as difficult as you might think.

While a bankruptcy stays on your credit history for a minimum of 7years and as many as 10 years, generally car loan lenders are interested primarily in your past 2 years of credit history. Even if you have a bankruptcy in your credit history, once 2 years have passed since the discharge many lenders are very willing to entertain the possibility of offering a car loan. The provision is that during the immediate 2 years before the application, a borrower must have reasonably good credit history with a minimum of late or missed payments.

Some car loan applications ask if you have ever declared bankruptcy in the past. Answer this question honestly and enclose copies of your bankruptcy discharge with your application. Your discharge papers should delineate all of the debts addressed by your bankruptcy.

One way to determine if your bankruptcy and all of the debts included in your bankruptcy have been removed from your credit report is to order a copy of your credit report yourself. Every person in the United States is entitled to an annual free credit report from all of the credit reporting agencies. You can also receive a free copy of your credit report if you have been refused a job or credit because of information on your credit report.

When you receive your copy, carefully review all of the information on it. You should compare the report with your bankruptcy discharge papers to ensure that all of those debts were removed. It is not unusual for creditors to attempt to continue reporting debts inaccurately even if those debts were included in the discharge.

Also take this opportunity to review all of the information on your credit report. Almost all credit reports have at least 1 or more errors on them. Erroneous information can result in a lowered credit score, so it is important to be diligent about correcting any errors or incorrectly reported information.

Other than your recent credit history, lenders also ask for verification that you are able to afford the car based on employment and income. Usually, lenders will ask for a copy of your current pay stub to verify income. Also, they usually prefer that you have been employed at your current job for at least a year. However, if you have a solid employment history and have only recently started your current job, then showing your pay stub is usually adequate.

Another requirement that many lenders have is that you be able to demonstrate residential stability. This can be by showing that you have been in your current residence for at least 6 to 12 months or by showing a stable residency history if you have recently moved.

In most cases, a bankruptcy is removed from your credit history within 7 to 10 years. If you have had a bankruptcy and have had good credit for the 2 years before applying for a car loan, then getting an auto loan should be a relatively easy process, provided you meet all of the other application requirements for employment, income and residency.