Thinking about car finance but worried about your bankruptcy history? This guide’s got you covered. We explain everything you need to know about bankruptcy, and how you can still get car finance.
Bankruptcy is a type of insolvency, usually lasting about a year. Insolvency is just a fancy word for when you can't pay off your debts. It’s a big deal and can stop you getting car finance in the future. Bankruptcy hurts your credit score in both the short and long term. This is because your name ends up on the public Individual Insolvency Register.
Being bankrupt makes getting car finance tough. Legal requirements demand disclosing your bankrupt status for loans over £500. Breaking any restrictions set by your receiver can lead to court orders and suspended bankruptcy discharge. It might seem gloomy, but remember, bankruptcy isn’t forever. Once discharged, you can work on rebuilding your credit score and explore suitable car finance options.
Once your bankruptcy is cleared (usually after a year), you can start looking for car loans. But your credit report will show your past bankruptcy for up to six years. This might make lenders see you as a higher-risk borrower, and they might be hesitant to approve new loans.
However, don't worry! There are lenders who specialise in helping people with bad credit, including past bankruptcies. You might have to pay higher interest rates or face borrowing limits, but getting car finance is still possible.
You can improve your credit score by following these steps:
To find out more about how you can improve your credit score, click here.
Even with a poor credit history, companies like Marsh Finance offer hope. We know credit scores vary and consider each application individually. While we can't guarantee approval, we welcome applications from those with bad credit. We aim to help those needing a car despite financial challenges.
Want to see if you’re pre-approved? Apply online today with Marsh Finance by clicking here.
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