I Have a Delinquent Loan on My Car. How Do I Get it Off My Credit Report?

Gerri Detweiler, Credit Expert, responds…

There’s no reason the payment history should report you as being current when in fact there would be missed payments. To bring your account current, you would need to pay the past due amount. Then, continue to make your timely agreed-upon monthly payments. However, this will not remove your past delinquent history.

From your description, it sounds as if the car was either repossessed, or the delinquent loan was accelerated so the full balance is due now.

If the car was repossessed, then it would have been sold at auction for a low amount, and you would be responsible for the remaining balance of the delinquent loan – even though you would no longer have access to or the use of the car.

I’m worried you’re confusing what you’re able to afford now with what you contractually agreed to when you financed the vehicle. Contracts are absolute. Life is not.

What you can do

If you’re worried about the delinquent loan being satisfied – and being reported as paid – then paying the full balance the lender is demanding in accordance with the financing agreement is the logical way. Another alternative would be to file bankruptcy to eliminate the debt and others you may have.

Alternatively, you can attempt to negotiate with the lender to come to a settlement you can both agree to. In rare cases, you may be able to negotiate for the lender to re-age the account to remove the negative credit history, although this is not guaranteed to work. However, the lender has the right to stick to the terms you legally agreed to in the initial financing agreement.

All of that being said, if you feel the lender has acted illegally, then you should absolutely consult with a consumer attorney who is licensed in your state.