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MelK10

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What should I do?
So I bought a car and unfortuantly did not purchase gap coverage. Unfortunatly I hit a deer and the car was totaled leaving me with a balance on $4500 on that car. I couldn't make two car payments because now I had no option but to buy a new car so stopped paying on the totaled one. Before it went to collections I worked out a payment plan with the company of $50 per month. I have been paying them as agreed for about 5 months or so now but on my credit report it does not show any payment history. It show's closed as derogitory and the balance. The balance goes down every month but the company is not reporting any payment history. I called the company and they will not make any changes to begin reporting payment history. So even though I'm paying it, it's not helping my credit right? But if I don't pay it, then it will go into collections and further hurt my credit

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Unfortunately, it sounds like this is what would be expected given the situation. You didn't fulfill the original payment agreement. The "Gentlemen's agreement" they setup for you will keep it out of collections and prevent any further damage to your score but it isn't going to help improve your score.

Do not underestimate the impact keeping this out of collections will have on your score. It will take a long time to pay it off at $50 a month but it will keep you from taking another significant hit on your credit score. If you can pay more.

This is a brutal lesson learned and flashing red light to anyone who is upside down on a new car, which is almost every recent car loan in the country. I keep Gap coverage until I have equity in a vehicle. As someone who is working hard now to make up for mistakes I have made in the past, I feel for you and wish you the best of luck but it sounds like you are already on the right path to rectifying this.

Good luck!

Dan

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