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car finance with bad credit

It is needless to say that timely credit debt payments can help build credit ratings much faster. But there is always a possibility that you may miss credit payments for your very own personal reasons. Factors such as lo of job or dwindling incomes often make borrowers do upside down on their debt repayments and that becomes a matter of concern if the issue is not handled in time. One such thing which many of you may face is repaying a car loan. Owning a car is a fascinating experience for most of the people across the globe but few pay heed to the darker side of debt. And when such a situation finally appears, you may naturally start thinking, “What happens if I miss car payment?”

While missing a couple of monthly car loan instalments might not ruin your credit instantly, it can lay the foundation for a long drawn battle to get your finances back on track. Successive accumulation of missed auto loan payments could be enough to destroy your credit profile and its effect may be felt for years to come. But it is possible to fix problems arising due to missing of car payments and avert a terrible financial situation which becomes hard to deal with later on. Remember, there is a direct correlation between missed car instalments and credit ratings. Although one or two missed car payments may not your good credit, other factors like the exact status of your credit slate and the time that has passed since you missed those payments can play spoilsport.

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He question then is, “How many months can you miss a car payment?” Technically, speaking a single missed payment will be reported by your lender to credit bureaus after passing of 30 days, 60 days, 90 days, 120 days or 150 days. The payment will be referred to as delinquent thereafter. So, the longer the time period, the harder will be its impact on your credit profile and a missed auto loan payment will stay on your credit report for up to 7 years.  Hence, make sure that the missed payment is paid back as early as possible. To ensure that, here are two vital tips:

  • Make sure that you pay monthly car instalment on the agreed upon date with your car loan lender.
  • If you have chosen automatic monthly payment plan linked to your checking account and there is no balance in it, try to repay missed payment by using overdraft facility
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William Stiller
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