A repossession, whether a voluntary repossession, or an involuntary repossession is very damaging to your credit score and can make it very difficult to finance an automobile in the future. A repo has a special designation on a credit report that is very damaging to your credit report. In addition, many repossessed vehicles once sold at auction have a remaining balance that you are still liable for. This is due to most vehicles being a depreciating asset and the loan typically being higher than the value of the car and as well the buyers at auction are usually looking to make money on the resell and typically the vehicles do not go at top dollar.
Once there is a balance owed if it is not paid to the lender many times they will charge-off that balance meaning your account on your credit report would now show an unpaid charge-off which is very damaging to your credit scores. In this process as well as when a car is totaled by an insurance company with a balance still out on the loan of a car many times causes confusion and can also result in errors on your credit report.
We have seen many errors including reclassifications multiple times on the payment status of an auto loan account. There have been many cases where an auto loan was not current, but was never repossessed, but was still classified as a repossession at some point on the payment history causing unnecessary damage to your credit report and scores that should be fixed immediately.
If you are currently are encountering one of these problems on your credit report or think you might be and would like us to do a free credit analysis call us today at 1-888-799-7267