My Bank Won’t Give me an Auto Loan Because of My Past Repossession

“Dear Steve,

Almost 7 years ago I voluntarily turned my vehicle in for repossession.

I wasn’t behind, but I knew I couldn’t afford it and handle a mortgage since I was purchasing a house.

Fast forward to this day it is on schedule to be removed off my credit in January of 2014 according to my bank (auto loan department).

Other than this blemish my credit is not bad. I do have a couple credit cards that I pay on time and with almost no balance after payment. My credit has been used on several occasions and each time paid to satisfaction and maturity.

Unfortunately, life happens, so the auto loan dep. at my bank are apprehensive about loaning me money for a vehicle because of the repossession.

1…….If I contact the creditor to reach an agreement today or payoff and we don’t come to a common ground could this effect the 7 year removal off my credit? Question

2……..Should I let the auto loan dep know that my vehicle was a voluntary repossession and I was current with my payments at that time? Thx


Dear Thad,

The fact you were current with your payment at the time is really irrelevant. The fact is you had a repossession.

Your bank might just have very strict lending standards that say no repossession in the last seven years.

There are two things you can do.

The first is to get a consolidated credit report and look over your three bureau reports to make sure there are no surprises there which might be lowering your credit score.

Why?While you’ve had a couple of credit cards since then, if they were store cards and not major credit cards like Visa, MasterCard, American Express, or Discover, then they can hurt you more than help you.

One place you can check your credit score for free is CreditKarma.com. Through them you can get an idea of what your credit score is and why. The online credit score modeling feature is pretty cool.

See also  Is a Voluntary Repossession a Good Idea? - Dan

If you were thinking of buying a new car it can be advantageous to talk to the new car dealer about financing. They often have access to other sources of funds and want to be flexible.

Just because your local bank said no it doesn’t mean someone else won’t say yes.

Please post your responses and follow-up messages to me on this in the comments section below.


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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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