Buying a camping trailer can provide you with family enjoyment and a place to get away from the elements. If you purchase one and it eventually gets repossessed, it can damage your credit score. Any time you do not live up to your end of a credit agreement, it will hurt your score.
Repossession
Regardless of whether you purchase a car, a recreational vehicle or a trailer, having it repossessed will be damaging to your credit. This is because you signed a document when you bought the trailer that said you would repay the debt. If you stop making payments and do not make any effort to fix the problem, the lending company will have no choice but to repossess your trailer. When this happens, it will be reported to the credit bureaus.
Duration
Once a repossession shows up on your credit report, it can do damage for several years. In fact, a repossession will remain on your credit report for seven years. During that time, lenders can see the repossession and will be less likely to give you credit when you need it. As the repossession gets older, it will start to have less of a negative impact on your credit score overall. After the seven years have passed, it will be removed.
Voluntary vs. Involuntary
When you are faced with the reality that you can no longer afford your camping trailer payment, you may have the idea to voluntarily allow the lending company to take it back. While this could speed the process up, it will not help salvage your credit score. In the eyes of the credit bureaus, a voluntary repossession is just as bad as an involuntary one. The only way that it could be less damaging is that it will result in fewer missed payments.
Fixing the Damage
If you have your camping trailer repossessed, you can still recover from the damage. While it will damage your credit temporarily, it will not keep you from getting credit forever. If you start to use what credit you have left responsibly and paying your bills on time, you can start to build your credit score back up. Paying down balances on other credit accounts and making small purchases with your credit can help to boost your score.
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