They came and took your car. Talk about a mean, ruthless, evil, underhanded thing to do! Maybe you should have paid for it…
Now you have a big black mark on your credit report. Don’t worry, it isn’t all bad. You already had several months of bad marks on your report from the missed payments, so this is more incremental than a major event on your credit report. I’m not saying it isn’t a big deal, because it is. But honestly, the 90 or more days you were late before the repossession is probably worse.
So, what will you see? Well, in the pay status section of the credit report entry for the car loan in question, you will see a notation for ‘Repossession’. This is a 40 to 100 point hit on your credit scores, depending on what your score looked like prior to the repossession.
The full entry on your scores would look something like this:
As you can see under the Equifax entry, the Pay Status shows Repossession.
How can you go about fixing this? Well, you may be out of luck for a while. The auto loan companies have REALLY good record keeping, and probably won’t be willing to let much go. However, as with any other negative credit entry, you should work to clean it up as much as possible. Make sure each item on the entry is accurate. You will notice, as an example, that TransUnion shows the high balance as being $33,462.00. In fact, the lease was for a third of that. In this case, the report owner could go back and dispute with TransUnion against this amount.
In talking to a rep at Ford Motor Credit, I was told that a repossession order, and in fact the late payment history, may not be enough to keep you from getting a car. You will get a higher rate, but that is sometimes needed to re-establish credit scores.
So, to sum up, a repossession is quite bad, but since it is the final event a series of missed payments, it is not as devastating as some other credit entries might be.
To get a copy of my FREE e-Book ‘The Top Ten Ways You Can Wreck Your Credit’, just click the link. You will be taken to a page where you can get more information about downloading the e-book. This book tells you what you should avoid doing concerning your credit, and what negative impacts can occur if you treat your credit wrong.
