When you are unable to pay for your car loan, the bank or lender who you got the car loan from will repossess the car from you so they can recoup the amount they granted to you by selling your car to another buyer. Car repossessions typically stay on your credit report for seven years.
You can try to get the repossession removed from your credit report by asking the company who granted you the loan to do it in exchange for settling the balance on your vehicle. So that you have leverage, it’s better to negotiate that they delete everything about the repossession in their records (and hence in your credit report) when you still have an existing balance to pay. Sometimes, the banks will remove the derogatory item from their record if you can convince them that you will pay the existing balance either in full or in increments. Otherwise, if they have already repossessed the car and you have settled the remaining balance, you won’t have much negotiating power to speak of and they will most likely just note it as “paid” in your credit report. That will not help improve your credit score.
In the event that you can’t convince your lenders to remove the repossession from your credit report, you can take legal remedies. Attorneys who specialize in consumer law can find technicalities that the creditors may not have complied with when they repossessed your vehicle. By going to court, you will have to pay for lawyer’s fees and contend with all the stresses associated with court appearances and strategizing with your attorney. But if you want to clean up your credit record, this may well be worth it.
This program is ideal for anyone interested in real and lasting credit improvement.
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