I am volunteering to give up my old car with a lot payments in order to get a newer model.
How can this effect my credit score toward purchasing a house?
2007-02-02 00:03:11 · 4 answers · asked by teacher77071 1 in Business & Finance ➔ Credit
That's like dropping a nuclear bomb on your credit report. If you let that happen, there is not car dealership in the world that will finance you and you can almost forget about getting a bank you a loan. Trust me in the long run it will cost you a lot more, than just paying off the car. Banks have a very funny thing about people not paying back thier money. Why not just trade it in, many dealers will just wipe out remaining debt with your trade in value.
2007-02-02 00:08:45 · answer #1 · answered by RjM 3 · 0⤊ 0⤋
Imagine a 767 jet going down in flames before reaching the runway.
That is representative of what a "voluntary" repossession will do to your FICO score and your ability to get a house in the future.
And let's be real, you are not "volunteering" your vehicle to the finance company. You are SURRENDERING the pledged collateral on an auto loan you are about to default on.
Let's call a spade, a spade!
And to perform a voluntary repossession primarily to upgrade your vehicle status is a bit of a myopic view of your finances. The "negative" equity in your current car will TRANSFER over to the new car when you finance the vehicle.
You will eventually have to bit the bullet on the financial impact of bad car deals.
But go right ahead. Invest everything you have in a "newer" model car that will depreciate and further distance you from the possibility of home ownership.
I just hope that is one HELL of a CAR!
2007-02-02 00:24:47 · answer #2 · answered by DaMan 5 · 1⤊ 0⤋
Do not do it. If you let your current vehicle repo. it will destroy your credit. It will make it almost impossible for you to purchase a home without a massive down payment.
Why don't you simply trade your vehicle in? I am a Finance Manager for a dealership and I get people approved every day that are upside down in their trades. You simply finance the negative equity into the new loan.
If you let your vehicle repo. the bank will simply send it to auction and sue you for the balance. So you will have a repo. and a judgment on your credit. Like I said, Don't do it.
2007-02-02 02:12:12 · answer #3 · answered by ? 7 · 0⤊ 0⤋
volentary or forable repossion is legalling the same thing my dear, it will look bad on your credir report. what you should do is sell the car for the most money you can get and apply that to the balance of the car and if there is a bal due, beg , borrow or what ever to finish it off, then your credit score will be excellant.
2007-02-02 00:19:58 · answer #4 · answered by lethalovely 2 · 0⤊ 0⤋