How do you fix your credit if you had a car repossession?

Answer 1

First, get all 3 of your credit reports (free for the first request in 1 year). Review each item. Look for accuracy-- and mistakes. If you find any mistakes, talk to the creditor -- the company to which you owed or paid the bill.

Second, make up a current budget that lists every monthly bill you now owe. Circle items that you can do without. For example, premium TV channels is one that people often discontinue in order to free up money. Determine, after paying every current bill, how much you have left to pay old debts.

Third, look back on the Credit Reports. List each bill you still, legally, owe -- including the car. Pick 2 of the smallest debts first -- or any number that adds up to a small reasonable amount of money. For those small debts, call the creditor -- the original place you owed the bill, not a credit company. Tell the original creditor that you want to pay off the entire (small) balance. Make sure you get a receipt marked paid in full. You can use that receipt to send to a credit company. Payment will not immediately remove a "bad mark" on your credit, BUT paying it will help because those paid entries will start to improve your credit picture.

Fourth, pick a credit card or item on your credit report with the highest balance - or for credit card, the one with the highest interest. From your budget apply as much money as you can to that debt every month. A place like Consumer Credit Counseling can possibly get the total reduced, IF you agree to pay through them at their agency.

Fifth, take a special look at the repossession. Consult a credit counselor about whether it is to your advantage to pay it off. An attorney can tell you if you are legally obligated to pay off the total that had been owed. You may find that, legally, that debt is still your responsibility.

Sixth, get a bank debit card-- it pays from money you HAVE and you cannot charge anything.

Seventh, make sure in your budget to SAVE. Even if ALL you can save is $3.00 to 10.00 a month, you'll have more in savings than you have today. Enroll in online banking and set up an automatic payment to a separate account or credit union account. Some people open a "Christmas Club Savings" -- however you choose, just start saving-- NOW. Make a strong deal with yourself-- "Under no circumstances will I touch that little bit of savings."

Eighth, do NOT use "Credit Repair" companies. Many of them promise everything but do nothing. YOU can begin to repair your credit yourself. But, it takes time and determined dedication!