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Posted in Auto Loans
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Question By
Susanoverton

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I totaled my car 06/30/16 and my lender somehow made my good credit 700+ to very bad 500!
I had full insurance coverage and GAP coverage so the loss was covered and Lender paid in full. Because Lender had to wait for payoff they ruined my good credit. Now I can't get a car loan. Is that legal?

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What's the status of that account? Did it show late payment(s) or charged-off? Even tho it was paid in full but if they werent made aware of your situation and you stop paying before your insurance paid it? that "might" affect the status on that account. However, couple of late payments "shouldn't" drop your score that much.

Top Contributor
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One late payment can drop your score by 100 points. The higher your credit rating, the bigger the drop. Was your lender aware of the totaled vehicle situation? If not, then they were expecting their regular on time payment. 

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Even when you are in automobile accident and your card is no longer functional, your loan is still your loan and you still have to make the payments.  You have to continue to make the payments until the insurance carrier hands the check to the bank.  Even if they say they are writing the check today and it doesn't arrive to the bank for 30 days, if you had a payment due in that time, you would still be reponsible for making the payment.   The insurance company should have written the check and when the bank cashed it, they would have refunded you any amount paid by the insurance over the amount you owed.   If while working with the insurance company you got hit for a couple late payments, that would account for a drop in the score.  if there were enough missed payments for them to report it as a colleciton, that accounted for a few more points.   Then, when the account was paid off, you lost some additional credit score points at that time as the loan was paid off and you get a reduction on your score based on the account no longer being active.  

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