After Bankruptcy: Please Don’t Go Right Out and Co-Sign for a Car
Improving your credit score is one of five ways that bankruptcy gives you a fresh start. Three years after bankruptcy you can have as good a credit score as anyone you know. Don’t mess that up. Don’t co-sign for a car for a friend.
Cherry, who filed bankruptcy with me in 2017, sent me an email last week that made me sad. She had recently financed a car with Santander at 21% and wanted to know why her credit score was still so low.
In turned out, Two months after her bankruptcy was discharged, she got a car loan with Regional Acceptance. Regional Acceptance finances cars at terrible rates for people with terrible credit. At least that's what her credit report said.
She denied that she had gotten a car loan that soon after bankruptcy. She just co-signed for a friend. co-signed for a friend who stopped paying a year later.
So here's the lesson. Right after bankruptcy, do NOT co-sign for someone whose credit is worse than yours.
Please do not go out right after bankruptcy and so-sign for a car for someone whose credit is worse than yours.