Requesting credit after bankruptcy 28 June 2021 at 10:19AM in Bankruptcy & living with it 18 replies 968 views

angie85

Hello,
Looking to build up my credit profile but had a question.

When I apply for credit for a car (relatively low value) - when they do the credit check does it tell them I have previously been bankrupt? Or is it a simple yes or no based on my score.
thank you

luvchocolate

Hi..when was your bankruptcy?

MalMonroe

Hi, it will depend on when the bankruptcy ends. Bankruptcy stays on your credit file for six years and after that will drop off. Lenders cannot see your credit score. They base their decision on the details on your credit file. If they see a bankruptcy on there, they may say 'no'. 

I had a Debt Relief Order (similar to bankruptcy) a few years ago and after it dropped off my credit report I was able to get car finance (like you, it was relatively low) with no difficulty. In fact, car finance was easier to obtain than a credit card at around that time. 

angie85

Thanks for the feedback

That was my worry would they see a bankruptcy on the credit search. Reason I ask is I was reluctant to go to a car dealership locally as I live in a small town and didn't want the guys there finding out/telling people I know. So perhaps it's better to try another dealership a little further away.

My bankruptcy was just 2 years ago so likely still on my file.

luvchocolate

It's on your file for 6 years 

angie85

Thanks all - sorry I should have been clearer with my question.

If I go to a local car dealership, would the check from their side say I'd previously been bankrupt or would it be a yes/no based on my credit score?

luvchocolate

It will show on your credit report for them to see...I have no idea on their response 

sourcrates

It shows on the "public information" section of your credit file.

Anyone doing a credit check on you will see it.

You will have next to no chance of being approved for any credit until the 6 years are up.

Sallyp2

If you have a IVA or DRO it will stay on your file for 6 years and even after that, depending on the finance/job position, it may follow you around. I suspect you will have very little chance of getting a car loan/CC. To be honest even if you do get a low value loan, you may not get car insurance as one of the questions relates to solvency.
You can but try

cymruchris

sourcrates said:

You will have next to no chance of being approved for any credit until the 6 years are up.

It's very rare I'd disagree with you - very rare - but not being approved for any credit until the 6 years is up isn't really very accurate. Usually once discharged, with a regular monthly income, getting back on the wagon with a pay monthly sim card, ensuring the electoral roll is up to date and all the usual, it's normal that someone could get a sub-prime credit card from the likes of Vanquis/Aqua/Capital One. Using that properly, spending and paying off in full monthly, would mean that in due course (and before 6 years) they'd be able to take further credit such as car finance. They may not get the best rates - but they would be able to get it with all other things being stable. They may also be able to get credit that's secured on the car. Again that'd likely be an expensive option. 

The best option would be to try and save a little and spend less on the car than they were planning so they have a runabout in the short term. 

Sallyp2 said:

you may not get car insurance as one of the questions relates to solvency.
You can but try

OP - There are some insurers that ask 'Have you been bankrupt in the last 6 years' - others that ask 'have you ever been bankrupt' - and others that don't ask anything at all. You'll get motor insurance - but you will have to pay very careful attention to the questions being asked, and don't just fly through ticking all the boxes like you might have done in the past, and find one that DOESN'T ask about your bankruptcy. Don't be tempted to lie - or rely on a comparison website and pretend you didn't notice. 

angie85

Thanks for all the responses 

A relative has offered to be guarantor on the car loan - is that a good option as it would help build up my credit file or is it better if the guarantor takes out the loan solely in their name and adds me to the insurance?