Credit Report & Scores » Report Advice » 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?


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

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