The more reliable you are about paying your bills on time, the higher you can reasonably expect your credit score to be. If you fail to pay your car payment, your lender may repossess the vehicle. The repossession will then appear on your credit report and hurt your score.
Facts
A car repossession will have a different effect on your credit score depending on how high it is. An individual with a high credit score can expect to lose more points than an individual with a low credit score.
Time Frame
The account you held with your lender, including the notation that the vehicle was repossessed, will appear on your credit report for seven years from the date the repossession occurred.
Considerations
The missed payments that resulted in the repossession may hurt your credit score more than the repossession itself. Your payments to your creditors are responsible for 35 percent of your credit score.
Misconceptions
Some individuals offer to give their cars back to their lenders voluntarily to mitigate damage to their credit score. Unfortunately, a voluntary repossession is just as damaging to your score as an involuntary repossession.
Effects
The more recently a repossession occurred, the greater the effect it will have on your credit.
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