is a defaulted loan-car, worst on your credit than a bankruptcy?

Question

what is the difference in how they are veiwed if you try to get a loan,or anything of that nature, and one of them is on the credit report?

Answer 1

Both are bad and both will make it difficult for you to get another loan. With the bankruptcy, you get both, along with every other discharged account, listed on your credit report. The bankruptcy will also stay 10 years while the defaulted car loan will fall off in 7 years.

Answer 2

As an ex-car salesperson repossession is worse than bankruptcy. People with bankruptcy's can often get a loan (although for higher interest rates than the average person). Whereas a repossession doesn't make it impossible, but you usually have to wait a while before a lender will trust you again.

Why?
Because a car goes down in value and banks HATE taking it back. They can't resell it for as much as they sold it to you for so they lose money.

Also, banks figure that if you're willing to risk losing a car (one of the two major essentials in life, a home being the other), then you're a pretty high risk person.

If you need a new car check out my site at www.1-800badcredit.com. You can try to get pre-approved for a car loan and jump start your credit.

Advice:
Try to get a loan for around $12,000, then look for a reliable used car. The interest rate will be high and you'll want to use this as a "starter car" only.

Make 18 straight payments then try to refinance (get a bank to purchase the loan for less interest) or trade it in and get a vehicle for a lesser interest rate (in which case, since it was used it's taken the worst hit in depreciation already so you won't be hit so hard when trading it in).

Do this twice and by the third car you should qualify for a normal interest rate.

Don't let a dealership talk you into more than $2,000 in warranty and GAP. They will negotiate on these items and remember, the more you pack onto a loan beyond the actual value of the car, just increases your "upside-down-ness" (the amount a car is worth vs. what you owe for it) when it comes to trading it in.

If you have a repossession on your credit there's nothing you can do but suck it up and try to stay on track in the future. The more distance in time you put beyond it, and the better behaved you are with your current debt, will increase your credit score, and typically within 3 years (about 2 trade-in vehicles) your score will be normal again.

Good luck to you!

Answer 3

Auto finance is what I do for a living and they are both bad, but it's easier to get someone approved for a car loan if they have a bankruptcy then it is if they have a repossession.

Answer 4

i'm not sure, but i think this site has the answer to this particular question. they've got lots of stuff about this anyway.