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Does voluntary repossession affect your credit?

Even if you decide to surrender your car voluntarily, there will still be a note on your credit report. And the information about this event will remain there for seven years. Such a mark will lower your overall credit score and then play a big role in any automotive-related loan events in the future. This means that if you decide to apply for another vehicle loan, you are very likely to be identified as a high-risk candidate and hence your interested will be higher than usual.

However, a voluntary repossession is much more beneficial than an involuntary one. If in the future you decide to take another car loan, the lender will see a note that you took a proactive approach to resolve the problem. It is also better to ensure that you pay any fees associated with repossession as well as the remaining loan sum before the lender seeks collector agency’s assistance. Collectors also leave a big negative mark on your credit report and hence significantly deepen the damage made by the repossession.

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