I’m sure that if you were willing to pay any rate you could find a way to do things immediately, but how long to wait for an auto loan after bankruptcy as part of a plan to build up your credit and get a better rate requires some patience and effort. While you’ll probably still get a high rate unless you borrow money elsewhere first, you can improve your rate slightly and better work this in as a part of your credit rebuilding plan.
The first thing you want to do after you discharge is get a copy of your credit report and make sure that things are reported accurately. It is extremely common for companies to not update your accounts as “included in bankruptcy”. Any accounts still marked as open, or with balances that you owe, count against you. Keep calling companies until they change your report to a zero balance and included in your discharge.
The next thing you want to do while waiting for an auto loan after bankruptcy is obtain a secured credit card. You can get one of these at your bank. You’ll want to use this very lightly, less than thirty percent of your limit, and pay it off in full each month. When you go to apply make sure that the bank reports your usage to the three major credit bureaus. As long as you pay this in full each month, this will give you a nice history of on time payments and credit use.
Making sure you make all of your payments on time each month is a big part of rebuilding your finances. You don’t want any new black marks on your report, so make sure you don’t get in over your head borrowing money for a car, or using your new card.
After using this steadily for about a year I’d recommend going ahead and looking to borrow money again. You’ll have a hard time finding approval still, and be offered high interest rates, but paying on time will help you rebuild your credit, and whether it’s for a car or something else they’ll continue to offer you high rates until you build up more history with loan payments.
So, how long should you wait for an auto loan after bankruptcy? Wait until you have your finances under control again, have a correct credit report, and have started slowly using your credit again.
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