{"id":2302,"date":"2021-02-15T08:00:11","date_gmt":"2021-02-15T08:00:11","guid":{"rendered":"https:\/\/www.consumerslaw.com\/blog\/?p=2302"},"modified":"2021-02-09T18:15:46","modified_gmt":"2021-02-09T18:15:46","slug":"understanding-vehicle-repossession-and-the-impact-on-credit","status":"publish","type":"post","link":"https:\/\/www.consumerslaw.com\/blog\/understanding-vehicle-repossession-and-the-impact-on-credit\/","title":{"rendered":"Understanding Vehicle Repossession and the Impact on Credit"},"content":{"rendered":"

\"\"The hard facts about Repossession.<\/strong><\/h3>\n

We all understand that when you borrow money, you need to pay it back. And if\u00a0you take out an auto loan, whether it\u2019s with a bank, credit union or other financial institution, if payments are late or missed, the lender has the right to repossess the vehicle.<\/p>\n

Signing a loan agreement means that you agree to the terms to repay the money borrowed, plus any interest and fees, within a scheduled period of time. Opting to finance a vehicle is an important decision and carries significant responsibility and financial discipline.<\/p>\n

Short Term v. Long Term Effects of Repossession<\/strong><\/h3>\n

\"\"When the borrower defaults on an auto loan<\/a> there are serious consequences. Immediately, daily life becomes upset without use of the car.\u00a0 Getting to work or handling routine daily chores, such as food shopping, taking children to school, or attending doctor\u2019s appointments, may present difficulties for the household.<\/p>\n

But more important is the long-term consequence. Repossessions can remain on credit reports for seven-and-one-half years, beginning from the date that the account first became delinquent.\u00a0 And, as long as the repossession stays on your report, it can seriously damage credit and impact the calculation of credit scores. Also, negative listings on credit reports may make it more difficult to secure new loans, and existing creditors could alter credit terms by lowering credit limits or increasing interest rates.<\/p>\n

Factors that can Damage Credit <\/strong><\/p>\n