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Advice on applying for an auto loan while enrolled in credit counseling - The Bills.com Blog
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Advice on applying for an auto loan while enrolled in credit counseling
Question: I am in credit counseling with dmp. I am having trouble getting an auto loan but have never in my life been late on a payment and have a credit score of 710. what are some options.
Answer: While you are enrolled in a credit counseling program with a debt management plan your credit score will not be affected, but an entry will be placed on your file.The entry on your file will generally say "DMP" or "credit counseling". This entry is put there to stop you from obtaining additional credit (the idea being that you are in a credit counseling program to get rid of debt, not to accumulate more). Once you have completed your credit counseling this entry is usually removed or updated to reflect that you have finished the program.
Although a credit counseling is supposed to help you in the long run, in the short term, it makes it difficult for you to obtain new credit because the thinking is that you went into the credit counseling program to get your debts paid off because you were
unable to manage it. According to the new Bankruptcy law, for anyone wishing to file for a Chapter 7 bankruptcy, it is mandatory for him or her to first enroll in an approved credit counseling program. Therefore, some creditors may view the fact that you are enrolled in credit counseling program as a precursor to bankruptcy.
Depending on how long you have been enrolled, I would suggest that you wait until you finish the program and then apply for the loan. If you are not in a position to wait then the only option I can think of is to get a co-signer or a guarantor for your auto loan. You can read more about credit counseling
on our website .
If you would like to get quotes from more lenders to see if you would qualify for an auto loan, Bills.com makes it easy for you. Just fill in your information on our auto loan page and a qualified lender will get in touch with you to discuss your options. Be sure to explain your situation them so that they are aware about you being enrolled in a credit counseling program.
I hope the information provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com
Also, make sure to get a free financial health check-up with Bills IQ!
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