Kitchener Bad Credit Car Loans

Kitchener Bad Credit Car Loans will get you into the vehicle you deserve, even if you have bad credit, no credit, or have declared bankruptcy.

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One of the biggest questions people who are considering bankruptcy or who have declared it in the past is how long it will affect their life. That’s understandable, because moving forward and not having to deal with things like a bad credit car loan in Kitchener is a good dream.

Learn just how long bankruptcy will drag down your credit score, so you know what to expect. Also, find out what things you can do now to improve your credit, so you can rebuild faster.

You will also understand why bankruptcy affects your credit score, plus how to move past that both in the short and long term. This will help you confidently go forward and rebuild your life.

The World Isn’t Over

Sometimes life can overwhelm you, creating a situation you hoped to never face. If you find yourself considering bankruptcy as a way to manage out-of-control debt, or have declared it in the past, it can generate more worries. After all, people might tell you with a bankruptcy there’s no way you can buy a new car or qualify for credit in the future. Or that you’ll have to get a bad credit car loan in Kitchener for the rest of time.

A bankruptcy will not forever keep you from getting a car loan.

The fact is you can get a bad credit car loan in Kitchener, even if you have previously declared bankruptcy. Not only that, a bankruptcy won’t affect your credit score forever, so there’s the possibility of moving on in life.

Credit Reports

Two major credit reporting agencies or bureaus, TransUnion and Equifax, produce reports about how you use credit, both past and present. Every month, creditors send information about how you’re maintaining any loans, updating the report. Lenders use this information to judge if you’re a good risk for a line of credit, including if you want to get a car loan.

As you probably already know, what’s on your credit report will affect if you can get credit at all. It also helps lenders determine what interest rate to charge you. This is the difference between a good and bad credit car loan for Kitchener shoppers, for example. The greater the risk a lender believes you pose, thanks to your credit report, the higher the interest you’re likely to pay.

Bankruptcy Effects

Declaring bankruptcy will absolutely leave a negative mark on your credit report. It in turn will affect what kinds of loans you can get, plus make it so you’re paying higher interest rates.

Exactly how long a bankruptcy will stay on your credit report depends on the credit bureau and its policies.

Equifax, which is the larger of the two credit bureaus, will keep a first bankruptcy on your credit report for six years from the date of the bankruptcy discharge. If you have a second bankruptcy, that stays on file for fourteen years, meaning it affects you for far longer.

With TransUnion, the length of time a bankruptcy stays on your credit report varies on local provincial legislation. It can be as little as six or seven years from the discharge date, or fourteen years since the filing date.

If these time periods sound long, they are. Declaring bankruptcy is a serious action and one you shouldn’t take lightly. The effects will follow you for some time, so use it only as a final resort, after you’ve exhausted all other efforts to manage your debts.

Clean Slate

Bankruptcy can be a way to wipe out negative credit accounts.

One thing about bankruptcy is that it allows you to work with a clean slate when it comes to debt. The harassing telephone calls and threatening letters in the mail are put to a stop. Hopefully, you use that fresh start to practice healthy, productive habits when it comes to managing finances, otherwise you’ll be back into the same mess in short order.

It’s absolutely essential that you learn how to manage your various bills, including any loan installments. Missing payments for a credit card, car loan, or anything else can trigger a cascade of events which will make you feel as if you’re drowning financially. If you’ve gone through bankruptcy, you know exactly what that feels like.

While declaring bankruptcy puts a negative mark on your credit history, it also sets a date when that goes away. Unlike the seemingly endless collection efforts by creditors, bankruptcy only shows up on your credit file for a set amount of time. As the bankruptcy ages on your report, it has less effect on your credit score as well as your ability to access new credit lines.

Fixing Efforts

Fixing your credit requires the right tools.

Of course, you don’t have to just sit around until an old bankruptcy finally drops off your credit report. You can do things almost immediately after the bankruptcy discharges to start improving your credit score.

During a bankruptcy you can apply for credit but must disclose that you have a pending bankruptcy, so your chances of being approved are limited. You also can possibly get a secured credit card, or wait until after the bankruptcy discharges, as way to start establishing positive credit again. Try choosing a card which after a period of time transitions into a full, unsecured credit line.

As time passes and you prove yourself more creditworthy, you can also get other forms of credit, including a bad credit car loan in Kitchener. Naturally, you want to keep a strict budget so you meet all your financial obligations, otherwise you might end up in the exact same spot as before.

The more credit accounts you get, within reason, and as you make payments on time while keeping usage relatively low, your credit score will increase. The length of time it takes to reach the score you had before depends on what score you’re aiming to achieve, your diligence in using credit responsibly, and what kinds of credit lines you obtain.

Bankruptcy Scores

Not only can your credit score recover from a bankruptcy, there are people who haven’t declared bankruptcy that lenders view as a higher risk. Both TransUnion and Equifax maintain a bankruptcy score, which is a measure of how likely a consumer is to declare bankruptcy within the next 12 to 24 months.

Just because a person has a fairly good credit score doesn’t mean they’re a good risk. The credit bureaus look at other factors like how frequently people apply for new credit lines, the amount of debt someone carries versus the amount of credit available to them, and how often someone uses credit.

While you can review your credit score, the bureaus don’t make your bankruptcy score available to view. Only potential lenders can see this score, helping them to better determine future risk. If you’re responsible with credit after a bankruptcy, you could actually benefit from this measure, allowing you to access loans which otherwise would be out of reach.

Bankruptcy can be stressful, but it doesn’t mean you can’t recover afterward. Naturally, it’s something you only want to do once, and then only if it’s absolutely necessary.