Ways to Rebuild Your Credit Even With Repossession

When you fall behind on a loan and your creditor repossesses your property, this shows up on your credit report and lowers your score. New creditors will see the repossession on your credit history and will be far less likely to give you a new loan because of it. However, you can start rebuilding your credit score at any time even if you've had a repossession.

Repossession

It's difficult to know how much a repossession lowers your credit score, but in general any repossession will lower your score significantly and make it tougher to get a loan. However, Yahoo Finance reports that just a single late payment that precedes a repossession lowers your score anywhere from 60 to 100 points. Once the repossession gets added on to your credit report, this, too, lowers your score even more.

Rebuilding

There's no secret to rebuilding your credit, it just takes a little discipline and the willingness to commit to a long-term program that establishes that you're a safe borrower. When you rebuild your credit, you take steps that impact your credit score in a positive way. Credit scores are based on several factors, including your payment history, number of new accounts, the average length of your accounts, how much of your available credit you use and the variety of forms of credit you have.

Behavior

To repair your credit, you have to show potential creditors that you've learned to handle your credit more responsibly since the repossession. The single most positive thing you can do to rebuild your credit is to make sure you pay all your bills on time, every time. Even a single 30-day late payment can erase your past efforts at rebuilding your score.

Assistance and Claims

People with bad credit scores are often confronted with offers to help rebuild or repair their credit scores. While these claims have merit, there's no reason you can rebuild your score on your own. Services offering to rebuild your credit usually just end up costing you more money, money that you could otherwise use to pay your debts. If you decide to use a credit repair or rebuilding service, the Federal Trade Commission recommends that you demand to see any terms in writing before entering into an agreement.