After having been discharged from bankruptcy, you are now ready to start rebuilding your credit history. Indeed, the effects of bankruptcy do not need to last for long. The sooner you can regain your good credit standing, the doors of financial opportunities will once again be opened for you. In this post, let’s discuss how you can qualify for a bad credit car loan and use it as a stepping stone for you to regain good credit.

Check your credit report. The first important step is to check your credit report. Order a copy of your report from each of the three major credit bureaus. Why is this necessary? You should make sure that there are no errors in your report which could inflict more damage to your credit. By starting out clean, you can work on improvement more easily. In case you find debts that have been supposedly discharged, send a letter to the bureau that issued your report to have them removed immediately.

It is also recommended to request the three bureaus to include your personal letter with your report each time an inquiry is made. This way, a potential lender will be able to see the circumstances that lead you to bankruptcy. Knowing the reason behind your bankruptcy record can make a big difference in a lender’s decision whether or not to approve your credit application. Take note that this service isn’t free and the credit bureau may charge an extra cost for including your personal letter with your credit report.

Plan your repayment. How much do you plan to borrow? What type of car would you like to buy? You might be thinking about borrowing a higher loan amount so you can purchase the exact type of car you want. Nevertheless, you should always consider your future responsibilities. Will you be able to keep up with the monthly loan payments?

If you dream of an expensive car, best wait until you have build-up your personal credit history. Thus, you will be in a much better position to negotiate with lenders and enjoy lower rates as well. For the meantime, consider looking for a cheaper car that will serve your purpose.

Compare loan quotes. Different lending companies offer varying programs for customers with bad credit. Of course, you’ll want to find a lender who will offer you the most affordable deal. Gather bad credit car loan quotes online so you can narrow down your choices more easily. Afterwards, you can do further investigation by checking out the policies of each prospective lender.

Remember that the quotes you will get are not the exact deal. That can change once your lender reviews your application or after you have negotiated with a lender. Also, keep in mind that some lenders have a strictly “NO Bankruptcy” policy. Be sure you will not be sending your application to the wrong lending company to avoid unnecessary rejections.

Refinance your bad credit car loan. After getting your bad credit car loan approved, submit all your payments on time. After a year, check your credit report and if your score has improved, consider refinancing your car loan so you can reduce your interest rate and monthly loan payments.