How Long Does A Repossession Stay On Your Credit
A credit report signifies the financial health of an individual. Not only this, a good credit report proves that you are good at managing money. We need to keep in mind that we require credit from time to time for different reasons like buying electronic appliances, buying a vehicle, buying a home. A good credit record is also necessary if you want a personal or business loan. However, any negative record can majorly damage your credit report and reduce your credit worthiness in the eyes of money lenders. This is the reason you should know how long a negative record will remain on your report. For instance, how long does a repossession stay on your credit.
It is very easy to give in to impulse and buy a house or vehicle that you can’t really afford, or it might just be a miscalculation on your part. At the same time, it is quite possible, that at the time you bought the vehicle or house, you had the ability to pay the monthly loan installments, but due to sudden pay cuts, lay off or any other emergencies, you may be rendered helpless.
If you are unable to pay the loan installments, the finance company will repossess your vehicle or house and this will have a great negative impact on your credit score because a repossession stays on your credit record for 7 years. This is why it is important to keep in mind that how long does a repossession stay on your credit, before you plan to buy a house or a vehicle. The wise thing to do is to go for something that costs lesser than what you can afford at that time. This way if some sudden financial crisis occurs, you will not be in trouble.
If by ill fate you have ended up in a situation where you cannot pay the monthly installments of your house or vehicle and have received a letter which says that the finance company is considering repossession, you should think of ways to avoid it. This is because of how long does a repossession stay on your credit. The best thing to do would be to sell the house or vehicle and repay the loan in full. If you can save your credit record from getting damaged you will be able to get a loan for a vehicle or home loan again.
With a house there are some other things that you can do to avoid repossession considering how long does a repossession stay on your credit. You can rent out the entire house or a part of it to help you pay the monthly installments and avoid repossession of the house. You can also consult your money lender to find out if they have any mortgage rescue plans for people in your situation. You can also consult financial experts and advisors who may be able to provide you with a way out of the predicament. Whatever you do, you should make your best efforts to avoid repossession of your vehicle or home considering how long does a repossession stay on your credit.