Credit Advice » Report Advice » Report Details » Repossession » Lender May Check Credit Report After Car is Repossessed

Lender May Check Credit Report After Car is Repossessed

Dear Experian,

Why is my old creditor pulling my credit report? I had a car that I could not afford after being laid off. I ended up giving the car back and my account was charged off. I have no open accounts with them, so why are they pulling my credit report one year later?

– CLU

Dear CLU,

Typically, when a car is repossessed or voluntarily surrendered the lender will sell the vehicle to recover some of the debt. However, the amount they receive for the vehicle at auction is often not enough to cover the full amount of the loan. If it is not, you are responsible for any remaining balance.

Because you still owe a debt to the creditor, they have a legal right to check your credit report, and to use information in your report to assist them in any collection efforts.

The term “charged off” simply means the creditor has written the account off as a loss. However, the lender may still attempt to collect the remaining balance or transfer the amount to a collection agency.

Thanks for asking.
The “Ask Experian” team

Review Your Free Experian Credit Report Today

Good credit begins with knowing where your credit is today. Get started with your free Experian Credit Report, updated every 30 days on sign in. No credit card required.

Get Started for Free

Rethinking Your Relationship with Money

Need to change your approach to money from a mental or emotional perspective? Learn how thinking differently can help.

Ask Experian for Advice

Your privacy and the information collected here.

Latest Tweets