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Repossession
Can anyone on the boards tell me how much will ones credit score take a dive due to a auto repossession? Just curious to know. Will it be hard to get another auto loan after that.
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1 Reply
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Auto Repossession and how it affects your Credit Score
Affects Your Credit Rating: Repossession can harm your credit score. You might sustain a loss of about 100-200 points on average. However, your average credit score will be taken into consideration, too.
Appears on Credit History: The negative impact of repossession on your credit score will be apparent for 7 years, that is, for the entire duration of its presence on a credit history report.
Impact of Repossession on Borrowability
Perception of the Lenders: A loan following a repossession would be hard to get since the lenders know the risks involved:
- Increased rates of interest.
- Less favorable terms for the issuing of loans.
- Expectations of much higher deposits.
Restoration of Credit Score post repossession:
Credit rebuilding is quite imperative after repossession. Therefore, the following must be adhered to:
- All payments should be clear and timely.
- Current debts should be decreased.
- Maintaining a watch on credit history to spot mistakes and inaccuracies.
Opportunities Available: Loans for repossession are available. However, only some offer financing for people with good credit histories, boosting their chances of getting approved.
A substantial decrease in one’s credit score is often observed post-repossession, and obtaining an auto loan becomes daunting. Hence, consider prioritizing lenders who understand your hardship and focus on repairing your credit.