Depending on the type of bankruptcy you file, it can stay on your credit reports for up to seven or 10 years from the original filing date. If the bankruptcy listed is accurate, you can’t remove it before the seven- or 10-year mark. If it’s listed incorrectly, however, you can take steps to remove it by disputing it with the credit bureau(s).
How to Dispute a Bankruptcy
If you checked your credit reports recently and found that a bankruptcy’s been listed incorrectly, it’s your job to reach out to the credit bureaus and have them correct it. This is called disputing an error, and it’s a fairly easy process. The only downside is having to wait for the credit bureaus to make a decision.
To properly dispute an error on your credit reports, make sure you reach out to the credit bureau(s) that has the incorrect information listed. You can send them a letter or file a dispute form online.
Make sure you point out the error(s) you want to dispute, and provide sufficient evidence with documents that prove it’s false. If you’re doing this by letter, make sure to include a copy of your credit report with the inaccurate information highlighted as well.
Once the credit bureau receives your dispute claim, they’re required to look into it. They’re given 30 days to investigate and make a decision regarding the dispute. When they’ve finished, they then send you a letter with their decision.
If the credit bureau doesn’t reach a decision within 30 days, the information that was disputed is automatically removed. If your error is indeed incorrect, the credit agency sends you an amended copy of your credit report and notifies anyone who pulled your credit report within the past six months about the error.
Getting a Car Loan with a Bankruptcy on Your Credit Report
If you can’t get your bankruptcy removed from your credit reports because it’s correct, the good news is that all hope isn’t lost. A bankruptcy’s impact lessens over time, and there are many lenders willing to work with those dealing with post-bankruptcy credit situations.
The types of loans you want to apply for are those offered by subprime lenders or buy here pay here (BHPH) dealerships. Both offer bad credit auto financing to those with bankruptcies listed on their credit reports, but have different qualifications for getting approved.
Subprime lenders run credit checks, so they’re going to see the bankruptcy listed. However, they base approvals on additional factors such as income, employment, down payment, and residence stability. BHPH dealers, on the other hand, don’t typically check your credit, so they won't care whether or not you've been through a bankruptcy. Instead, these places base approvals on your income and down payment.
Keep in mind that you may not be able to improve your credit score over time with a BHPH car loan. While more do it in this day and age, some of these dealerships may not report loans or on-time payments to the credit bureaus. Still, if you’ve recently had a bankruptcy discharged and need a vehicle, it wouldn’t hurt to check out one of these dealers.
The Bottom Line
Unless the bankruptcy listed on your credit reports is inaccurate, you can’t remove it before the seven- or 10-year mark. However, having a bankruptcy on your credit reports isn’t the end of the world, as you can often get approved for an auto loan after it’s been discharged. The key is to work with the right lenders, and we want to help you find them.
At The Car Connection, we want to connect you to a local dealership that has the lending resources available to help those dealing with unique bad credit situations, including bankruptcy. Get started by filling out our simple and free car loan request form today.