Bad Credit Car Loan

A: I'm sorry that you've had such severe financial troubles. I hope that your bankruptcy will allow you to have a fresh start. But, it won't happen immediately. It will take years for your credit history to normalize and your credit score to rise.

In the meantime, you may have a lot of trouble financing a car right now. You can shop around, but a lot of what you'll find will depend on how low your credit score is. Your credit score will determine how high an interest rate you'll pay on your car loan.

Start by pulling a copy of your credit history and score at AnnualCreditReport.com. (The credit history will be free, but you'll have to pay $7 for a credit score.) Then, start shopping around with lenders.

If you can't get a conventional lender to loan you money to buy a used car, consider a P2P lender. P2P stands for person to person lending, and it is a growing category of lender, primarily Internet-based.

With a P2P lender, you provide your credit history and score and ask for the amount you need to borrow. Investors (who by and large are ordinary folks like you and me) will decide how much of a risk you pose and tell you how much money they'll loan you and for what interest rate.

A more personal way to do this is to see if you can get a family member to lend you the cash you need to buy your car. You can write up a formal agreement, or go to a site like Virgin Money, which will formalize the loan, create a repayment schedule, and arrange for cash to be automatically withdrawn from your account each month.

It's possible that you won't even qualify for a car loan right now, so be sure to figure out a backup plan. Keep this in mind as you're going through the process, and try to develop a back up plan.

NOTE: Ilyce R. Glink's latest ebooks are "Credit Scoring Secrets" and "How to Find a Great Real Estate Agent," which are available at her new, all-video website, www.expertrealestatetips.net. If you have questions, you can call her radio show toll-free (800-972-8255) any Sunday, from 11a-1p EST. You can also write to Real Estate Matters Syndicate, PO Box 366, Glencoe, IL 60022 or contact her through her website, www.thinkglink.com ©2008 by Ilyce R. Glink. Distributed by Tribune Media Services.