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Posted in Auto Loans
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Question By
Brymip

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Charged-Off Auto Loan Causing Monthly Credit Score Decrease?
I had a car financed with myself as the co-signer about 5 yrs. ago. Long story short but the individual I co-signed defaulted on the loan (unbeknownst to me) and the car was subsequently repossessed and "charged-off." This happened about 18 months ago, all of a sudden during the last several months the original lender has began actively reporting the loan as late each month. I was under the impression that once it's "charged-off" the account cannot continue to be reported as "active" with each "missed payment." I understand I can still technically be held liable but my credit was already hit once when it went into a "charged-off" status is there a way to continue to prevent taking a monthly hit; aside from making the payment?

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They cannot continue to report late payments if the loan is charged off, but they are allowed to update the charge off every month to keep your scores knocked down. If they are reporting missed/late payments when the loan is indeed charged off and they don't have the account marked as charged off then you could contact the credit bureaus to correct that problem, but either way your credit is not going to improve any at this time until this ages for a while. The missed payments will still be shown with the charge off, if that was your question.

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