Credit After Repo

The day has come when times are tougher than usual and the once beautiful credit rating of 700 plus with little debt has suddenly been turned into a 500 credit score and the new Fiat you were driving has now turned into a 1998 Mazda you bought for $500.00. It’s unfortunate and will absolutely have a negative impact for at least the next several years, it will have an impact in almost everything you do. It will affect insurance premiums, it will affect a professional job hiring, during the interview they will have your credit report right there and discuss it one on one. In some cases they will ask you to take care of any negative credit before getting hired, in other cases such as a repo, they will outright deny you for bad credit.

It is almost certain this will actually haunt you for at least 7 years, in fact in many cases as you can read in this other article here on deficiency balances, they will most likely sue you for a deficiency balance if they see that you have obtained a job.

What people typically give up in a credit crisis

You are not alone, there are millions of others with lost or downgraded jobs that were forced to sacrifice one or more of the items they expected would continue to be able to pay. Typically people usually stop paying credit cards first and then decide that the car must also be downgraded in order to keep the house or continue paying the rent.  Even the businesses or businessmen that we have repossessed let the uneccessary things go first, it’s the survival mode. Do you really need that Ferrari or that quick getaway condo in Colorado? These things tend to go first, but the consequences are dire, for example if that business counts on lines of credit and suddenly has a Ferrari repo on their credit, that line of credit will not be extended ultimately causing the business to collapse. Average people losing their jobs or suddenly becoming way over extended usually realize this and purchase a old beat up car for the day the payment car is repo and the credit goes bad. It kind of reminds me of the hierarchy of credit, the natural process that people take on the dime knowing trouble lies ahead.

How long will my credit rating from the repo affect me moving forward

It will take 7 years for it to be off of your credit, that is 7 years from your last payment. There will be collection companies that purchase this debt and continue to confuse as far as when the debt was last paid, so you must keep track in order to ask them to prove it after 7 years. That being said, there are many programs that offer subprime financing for new credit cards or really bad new loans ranging from somewhere around 16% to 28% interest which is tough. If the reason for your repo is justified, such as a job lay off, or a medical emergency let them know and it may help slightly.

Will a repo on my credit stop me from getting a mortgage

With a good solid credit rating moving forward, a good mortgage rate is definitely a possibility in the first 2 years of improved credit perhaps bringing it to the low 620’s which is from what I understand what is needed to get a mortgage. Bottom line is credit after repo is real bad, but with a little bit of work and patience you can quickly build that credit back up.