Every Canadian, coast to coast, is experiencing extreme financial stress. A consumer proposal may be a better option than filing for bankruptcy if you need help and are unable to pay your debts.
You can get your finances back on track with a consumer proposal, but there are some short- and medium-term impacts you should be aware of.
How consumer proposal impact your credit score
In essence, the consumer proposal asks your creditors to forgive a portion of your debt and extend the time you have been granted to repay the balance.
Naturally, this makes things very difficult for the creditors, who will inform Equifax and TransUnion about it.
Your credit report will reflect this adverse status for a maximum of seven years, which could increase the cost of future credit.
Putting yourself in a strong financial situation will help you purchase a new car with confidence
You might be able to obtain a new auto loan even if you don’t take any steps to raise your credit score. But you should start making improvements to your credit score.
A solid credit score will help you save money on loans because you never know when you’ll need money.
You can find out your current credit score and get a spot to start tracking your advancement by signing up for Credit Karma.
Once you obtain a copy of your credit report, you can enrol in services and initiatives that will assist you in rebuilding your credit, including Koho Credit Builder.
This service will report an active tradeline to TransUnion and Equifax for just $7 per month for the following six months.
With these new tradelines, your credit score will increase, particularly if you recently exited a consumer proposal.
You may check your budget to see how much cash you have for your new automobile while you wait for your credit score to start improving.
How to create a budget in the face of high inflation
You’ll need to dig deep and look for methods to reduce how much you spend each month because Canadian inflation is at a level that hasn’t been seen in decades.
Your debt should significantly decrease as a result of the consumer proposal, leaving you with more cash on hand to pay for your new vehicle.
Where to go to have a vehicle loan approved after a consumer proposal
You can visit a nearby auto dealership that has a reputation for assisting people with bad credit like you obtain the cars they need if you urgently need a new car and can’t wait for your credit score to improve.
You shouldn’t have any trouble being accepted because they will have a long list of lenders they work with.
The dealership can also advise you on how to raise your credit score based on your own circumstances. You won’t find this service anyplace else.
Since automobile prices are rising, you should contact your nearby dealership right now to learn how much you may borrow for a new vehicle. Give the dealership a call right away—you have nothing to lose.
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!