Sure, most lenders shy away from lending money to people who have recently sought the protection of bankruptcy. But that actually doesn’t last very long, even though credit reports will include your bankruptcy for 7-10 years. While debtors often get credit card offers (albeit low limits) shortly after their bankruptcy case closes, getting a loan will require some planned action on your part. Here are the proven strategies that work:

  1. Get a decent job and keep it. A good employment history speaks volumes. Lenders are willing to take a risk, but steady employment is almost mandatory. If you’re borrowing money for a car—employment may be all you need. Check out used car lots that pitch “you work—you ride”. They are growing in number.
  2. Start savings money. Plan on making a down payment of 20% or so on any loan you may negotiate. Not only will it help qualify you, but it will obviously lower your beginning balance.
  3. Review your credit report. Even though it may be ugly, be sure the information is correct. You don’t want to take the heat for someone else’s mistakes too.
  4. Learn how to improve your credit score. See our March 2014 newsletter article: “7 Steps to Improve Your Credit Score”.
  5. Find a hometown banker who will work with you. You’ll have more luck locally where the bank knows your employer, your background, and your story. Treat them like your new best friend – they just might be.
  6. Start small and practical. Don’t plan on a loan for something frivolous. Begin with a small loan for a basic need – like a car or maybe new tires for a car.
  7. Consider asking a family member or friend to co-sign. You can usually get a better interest rate with a co-signer. For a while, this may be your only way to get a sizable loan. It will need to be someone with a good credit history.
  8. Be patient. It took a while to ruin your credit, and it will take some time to restore it.
  9. Put your new loan on autopilot. When a lender gives you an opportunity, don’t blow it. If possible, set up an auto withdrawal from your bank account (which pays out before the due date), and make sure there is money in the account.

Don’t listen to the naysayers who may tell you this is hopeless. Like most goals in life, it is possible with the right attitude, smart strategies, and the required effort.

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