There are many ways to get a car. For some, these expensive machines are passed down from parents. However, most people save up for or finance their vehicles. Though most strive to be responsible, there may be reasons why some drivers are late with car notes. Luckily, this may not be reported to the credit bureaus right away. Still, missing too many can lead to the car being repossessed.
Most credit bureaus give a grace period of sorts for late car notes
Keeping up with loan payments is paramount for building and maintaining good credit. However, sometimes the best-laid plans can go awry. For many people, this is the case with their car notes, as unexpected expenses could get in the way of payment schedules. Luckily, in most cases, a late car payment won’t be reported to the credit bureaus right away.
So, how long before lenders report late car notes to the bureaus? According to The Car Connection, most financial institutions don’t report these instances until the payment is 30 days late. Of course, this may not be the case with every company, so drivers should check. However, the late payment typically won’t impact your credit score before it’s 30 days late. Readers should know that there could be other consequences for paying a car note late. This includes additional fees, collection calls, and more interest incurred.
When do car lenders repossess vehicles for nonpayment?
As mentioned, paying car notes late can have intense consequences. However, people who fear they may get behind should know that repossession could be an option for lenders down the road. Sadly, repossession rates are up, and this action could be taken before many drivers would assume. The number of missed payments before this happens varies by lender and state laws. Some may do it after a single missed payment.
Still, the rule of thumb for several institutions is two or three car notes. Reading an official loan contract from your lender should clarify exactly how long it takes before a repo truck shows up. The same is true for calling the financial institution and asking about how they handle repossession. Reaching out could mean that the institution offers a payment plan to allow struggling borrowers to catch up with their payments.
Buyers should know that a repossession will hurt their credit scores tremendously. For more reading, check out this recent article on ways to save a car from being repossessed. Remember, it’s always better to act sooner rather than later once you’ve fallen behind with payments for your vehicle.
