Rebuilding Credit after a Consumer Proposal
I have recently completed a consumer proposal (8 months ago) and I am in the process of rebuilding my credit.
(I currently have a secured credit card) but I would like to purchase a car. Would it be better for me to wait until i have 1 solid year of credit history with my credit card or should I attempt to get a loan now?
You can begin to repair and re-build your credit immediately following the conclusion of your consumer proposal. With respect to getting a car loan after either a consumer proposal or a bankruptcy, you will probably find that you will get a better deal if you wait until you have built up a sufficient down payment.
For example, if you try to borrow to buy a car one month after your consumer proposal has been completed, and you only have a $500 down payment, you will probably pay a high interest rate on your loan (due to the small down payment, and the fact that your consumer proposal just ended). The interest rate could be 14% or higher.
On the other hand, if you wait six months or a year and save up a $2,000 down payment, you will probably pay a much lower interest rate, perhaps 9% or 10%, depending on other factors (such as your income).
The answer to your question is that waiting makes sense, particularly if you use the time to save up a larger down payment.