How to Recover Your Credit Score After Late Payment on Your Auto Loan
Your credit score is a critical asset. If you’ve had any late payments on your auto loan, your credit score can fall. This is how to bring it up even after a late payment.
Why You Paid Late
Even a single missed payment can lead to problems with your loan. Now is the time to think about why you missed the payment. It’s a good idea to get your finances in order and see what’s going on. As those at Lantern by SoFi point out, “You may also consider refinancing your car loan when you can’t keep up with payments for your current loan.” This can be a good option if you struggle with your existing loan payments and want to prequalify for auto refinancing.
Begin Paying On-Time Right Now
Once you’ve sorted out why you’re having troubles, you’ll want to make sure that you consistently pay your loan on time as you look to the future. Consider where you might make cuts in your current spending. Even a few extra bucks can make a difference and ensure you’re staying on top of your expenses. So it’s best to look for ways to rejigger your finances to prioritize essential things in your life, like your auto loans and make sure you can pay for them.
Let Your Lender Know
If you have any temporary cash flow problems, it’s best to let your lender know as soon as possible. They need to know about issues that are affecting your temporary financial picture.
A Goodwill Adjustment
After the lender knows that you are having problems, they can do things to help you figure out how to keep up with the payments and avoid long-term damage to your credit score. But, of course, lenders may be sympathetic to problems that you are having right now. So let them know that you have a problem, such as an issue with a family emergency or a sudden expense.
A lender will hear what you have to say and respond accordingly. If you have made all prior payments on time, they’ll more than likely be willing to work with you to sort out this issue right now before it becomes a much bigger problem.
Get it Removed
In some cases, you can even get the late payment removed. This is a real possibility if you are willing to pay more next time. For example, a suitable lender may be helpful to add the payment to the tail end of the loan.
They can agree that you can pay off more next time. It’s all possible when you take the time to talk to them. Ensure all credit rating companies know that the black mark has been removed from your credit score once this agreement is in place.
There are many ways to protect your credit score, even if you have a late loan payment.