Once you have had a vehicle repossessed, it will be harder to get another vehicle while your credit is re-established. On the bright side, lenders are still willing to take a chance on a new loan with some blemishes on your credit. A car loan after a repossession may require some work, but it’s not impossible to get another car loan.
Your new credit rating with your repossession will put you into a different category of Sub-prime Lenders. Experian, one of the three main national credit bureaus, considers a fico score of 679 to be sub-prime. The number differs slightly depending on the lender in what they feel to be sub-prime. There is an organization called “AWARE” (American Well-informed on Auto Retailing Economics) that helps educate the consumer on auto financing. Below are some tips for getting your credit repaired.
Getting A Car Loan After Repossession
Know your Credit Score
Without your credit score, you won’t know how bad or not so bad your credit is. There are three main credit reporting agencies that you will want to obtain your report from:
Equifax: P.O. Box 740241, Atlanta, GA 30374-0241, 1-800-685-1111.
Experian: P.O. Box 2104, Allen, TX 75013-0949, 1-888-EXPERIAN (397-3742)
TransUnion – P.O. Box 1000, Chester, PA 19022, 1-800-916-8800
Going directly to the three credit agencies will cost you a fee, but you can get a Free credit report once every 12 months from the government. Go to this Federal website to get the details:
Once you have received your reports, check each line on the report and make sure there are not any errors that you need to dispute. You will want to have evidence to correct the discrepancy like a check stub, receipts of payments or a “Paid In Full” letter. You will want to have all three credit reports pulled because not all lenders report to all three credit agencies. One report might show more details on it that you may need to take care of and is not showing on the other credit reports.
Repair your credit
Look at all the lines that have smaller balances and try to get these paid off. Keep all other current bills up to date and make sure to pay on time. Some lenders will even agree to a lower payoff amount as long as you get it to them within the agreed amount of time. Submit “copies” of the receipts or letters from the debt company to each of the three credit bureaus stating these are paid off. Reporting to the agencies will remove these off of your credit report so that your score will eventually go back up. Save the originals in a file marked “credit repair” so you can access it quickly if one of the credit agencies needs it again.
Save up a Down Payment
A lender looks at you more seriously when you have some money put away for a down payment. It shows the lender that you are now in control of your finances. Cash is King, 10% of the loan is good, but 20% is way better for a down payment.
Don’t Let Repossession Stop You From Receiving The Car Of Your Dreams
Organize, Organize, Organize
Start getting all your paperwork together that you need in order to receive the loan. The dealership might even have a list handy for you to take. The list can prepare your information to submit to get the credit. A couple of things to help you to prepare are your Drivers license, proof of employment with a tax return or current pay stub, and current utility bill.
The sky is not the limit.
For whatever reason, car repossession in the past, that means you probably thought the sky was the limit before, but that is not the case right now. Be realistic when looking for your next car. Think economical instead of a luxury. You are not yet in the position to get the next most magnificent vehicle that just came off the line. Remember, you are trying to repair your credit, and get transportation. With some patience and structure, you can work towards the goal of having the vehicle you want.