When car payments fall behind and the lender feels that you can no longer make the payments, you might experience what's called an automobile repossession. This means the bank or auto lending company must take back possession of the vehicle to cover losses of payments and interest. In the event a car repossession happens, it can create a negative mark against your credit and lower your credit score a great deal. Other lenders may shy away from giving you a loan until you've rebuilt trust and regained your credit integrity.
Not all car repossessions are an indication of poor financial management. Some are the result of unforeseen medical problems, personal or family issues, loss of employment, or any number of situations. But no matter what caused the repossession, it's a good idea to contact the lender or collection agency to whom you owe the balance and set up a payment plan. Although the automobile has been repossessed, this doesn't clear the balance from your records - it's not the same as a bankruptcy. You might not be able to make the same amount in payments as you were obligated to make before; however, you can likely negotiate a lower payment amount for now to get started on a payback.
Credit Repair after an Auto Repossession
Just simply taking a step to create a payment agreement will start you back on the road to better credit. As you make payments, they will be reflected on your credit report. This shows other lenders that although you had a car repossession at one time, you are making every effort to clear your name of the ordeal and make it right.
Analyze Your Report
Get a copy of your credit report and analyze it carefully. Make sure the details reported about your auto repossession and balance due are correct. If you notice an error, contact the creditor and ask them to correct the information. Also, send a letter of correction to the three main credit bureaus - Transunion, Experian and Equifax. You can send a dispute letter by mail or fill out a dispute form online. Your credit report can be obtained once per year for free at this website: AnnualCreditReport.com (this is the only authorized site for this).
You might also want to pay the extra fee and get a copy of your credit score. Keep it handy and check it again in about six months to a year to see if your payment efforts are causing it to increase. As you pay all your bills on time every month, you should start to see improvement.
Rebuild Credit and Trust
You might have to start at the bottom and work your way up with rebuilding your credit. Consider saving up about $300 to $500 and obtain a secured credit card. A secured card is issued based on your savings minimum and you can only spend as much as you have deposited into the account. But most secured credit cards will report your balance payments to the credit bureaus. As long as you keep the balance paid in full, your credit score will get a boost. These aren't meant for the long term but can be instrumental in repairing credit after an auto repossession.
Credit Repair after an Auto Repossession
If you've lost your car due to poor financial decisions, it's a good idea to seek financial counseling. A credit counselor can help you determine what went wrong and how to prevent it from happening in the future. You'll also receive advice about credit repair and budgeting to help with future finances.
An auto repossession doesn't have to determine your entire financial future. Don't hesitate to move forward with smart credit repair steps today!
Not all car repossessions are an indication of poor financial management. Some are the result of unforeseen medical problems, personal or family issues, loss of employment, or any number of situations. But no matter what caused the repossession, it's a good idea to contact the lender or collection agency to whom you owe the balance and set up a payment plan. Although the automobile has been repossessed, this doesn't clear the balance from your records - it's not the same as a bankruptcy. You might not be able to make the same amount in payments as you were obligated to make before; however, you can likely negotiate a lower payment amount for now to get started on a payback.
Credit Repair after an Auto Repossession
Just simply taking a step to create a payment agreement will start you back on the road to better credit. As you make payments, they will be reflected on your credit report. This shows other lenders that although you had a car repossession at one time, you are making every effort to clear your name of the ordeal and make it right.Analyze Your Report
Get a copy of your credit report and analyze it carefully. Make sure the details reported about your auto repossession and balance due are correct. If you notice an error, contact the creditor and ask them to correct the information. Also, send a letter of correction to the three main credit bureaus - Transunion, Experian and Equifax. You can send a dispute letter by mail or fill out a dispute form online. Your credit report can be obtained once per year for free at this website: AnnualCreditReport.com (this is the only authorized site for this).
You might also want to pay the extra fee and get a copy of your credit score. Keep it handy and check it again in about six months to a year to see if your payment efforts are causing it to increase. As you pay all your bills on time every month, you should start to see improvement.
Rebuild Credit and Trust
You might have to start at the bottom and work your way up with rebuilding your credit. Consider saving up about $300 to $500 and obtain a secured credit card. A secured card is issued based on your savings minimum and you can only spend as much as you have deposited into the account. But most secured credit cards will report your balance payments to the credit bureaus. As long as you keep the balance paid in full, your credit score will get a boost. These aren't meant for the long term but can be instrumental in repairing credit after an auto repossession.
Credit Repair after an Auto RepossessionIf you've lost your car due to poor financial decisions, it's a good idea to seek financial counseling. A credit counselor can help you determine what went wrong and how to prevent it from happening in the future. You'll also receive advice about credit repair and budgeting to help with future finances.
An auto repossession doesn't have to determine your entire financial future. Don't hesitate to move forward with smart credit repair steps today!
