When you purchase a vehicle, you generally understand that you may be penalized in some way for making a late payment or completely missing a payment.  However, it is often unknown that a late or missed payment may be reported as a delinquency to the credit bureaus.  This may not be completely spelled out by the car dealership when purchasing a car, and/or such a policy may be written in fine print in the contract that you sign.  Regardless of what the reason may be for being late on a payment or completing missing a payment, it is shocking to see how your credit score could go down by nearly 100 points, or even more, depending on the particular facts of your situation.

What Should I Do to Protect My Credit Score?

There are ways to demonstrate to the credit bureaus that you are in fact creditworthy and that one late or missed payment is not representative of your credit history.  The harm a late or missed payment can have on your credit score is especially frustrating for individuals who have traded a car in and intentionally failed to make a payment, with the understanding that the total balance would be paid off by the dealership in the near future.  Given that there may be lag time between when you trade in your car and when the total balance on the car loan is paid off, your credit score is at risk if you fail to make a payment. 

Regardless of whether you can consider yourself at fault for making a late payment or missing a payment completely, you do have the ability to contact both your car loan lender as well as each of the credit bureaus.  The best way to explain yourself is to write a letter indicating why a payment was late or missed, and why your credit score does not deserve to take a hit.  It may turn out that your letter has no effect at all, but it is better to voice your position in writing.  However, it is possible that your credit score may not be harmed too much if, after evaluating your entire credit history, it is obvious that this one late or missed payment is not reflective of your creditworthiness.

Avoiding Late and Missed Payments

 Whether you have missed a car payment because you were financially stressed one month, or if you made the mistake of missing a payment after trading in your vehicle, among other reasons, you should take all steps possible to avoid the same situation in the future.  If you missed a payment because of especially high credit card debt, you should consider ways to reduce or eliminate this debt, leaving more room for your car payment.  In the future, when trading in a car, continue to make payments until you receive confirmation that your entire loan has been paid off by the dealership.  If you have overpaid in the end, you will be reimbursed for such overpayment.  To better understand what options are available to you and what options will be in your best financial interest, you may wish to speak with an attorney who can provide you with an individualized evaluation and plan for managing and/or eliminating your debt.

Contact Kansas City Bankruptcy Attorney Douglas Breyfogle Today to Schedule a Free Consultation

As a Kansas City consumer who generally pays your bills on time, the frustration associated with seeing your credit plummet all because of one or two missed car payments can seem unbearable.  Being late on a credit card payment once in a while typically does not have the same negative effect on your credit the way a missed or late car payment does.  As such, if you are facing financial difficulties or simply have questions on how to ensure you are doing whatever you can to protect your credit, it is important that you consider seeking the guidance of a qualified Kansas City Debt Relief and Bankruptcy Attorney.  As a Kansas City Bankruptcy Attorney with more than twenty years of experience, Douglas Breyfogle has a reputation for helping consumers like you face and overcome debt once and for all.  If you would like to discuss your situation with Mr. Breyfogle, contact our office today by calling (913) 742-8700 to schedule your free consultation.