How to Get Financing after Losing Property to Repossession
While the rate of repossessions may be on the decline, there are still a number of people faced with the prospect. A creditor may repossess property, such as a car, boat, RV or motorcycle, if the property is used as collateral to secure a loan to purchase the property. Your contract must include terms for repossession, including if you fail to make required payments or fail to meet any other terms. California law provides for specific procedures for licensed repossession agency to follow. If you've lost property to repossession, contact a qualified Orange County repossession defense attorney to secure your rights.
Consequences of repossession on your credit
Having a repossession listed on your credit history lowers your credit score and can prevent you from obtaining a top financing deal with a low interest rate. Creditors classify consumers with low credit scores — generally around 679 — or a blemished credit history as subprime. Historically, lenders would not extend credit to subprime consumers. Today, more lenders are willing to take chances with debtors. It can take one year or longer to fully repair your credit after repossession. The key is to success is consistency in payments, keeping your debt to income ratio low.
If you've had the unfortunate experience of repossession, you may follow these tips to qualify for financing a subsequent vehicle:
- Review your credit report — Order your credit report from all three credit bureaus and dispute any inaccuracies.
- Repair your credit — Settle any outstanding balances, and make and follow a budgeting plan to bring any past due balances current.
- Set aside money for a down payment — Your goal should be to save 20 percent of the purchase price.
- Keep your purchase within your budget — Make sure you can afford the payments on your new purchase.
The Fishback Law Corp is dedicated to providing bankruptcy services and other forms of debt relief to overwhelmed consumers throughout Southern California. Contact one of our Orange County debt relief attorneys to learn more about how we can help you save your property or rebuild your credit.