What is the meaning of car loan charge off?

I was looking at my credit report, and I saw something that said I had an auto loan charge-off. What does this mean? I had a repo a few years ago, but I didn't think that was the same thing.

Answer
If you had a repossession because of a car loan in your past, some lenders will initially report it as a loan charge-off if they can’t collect payment on it. In most cases, a charge-off is followed by a repossession, which sounds like it’s the case in your situation.
Typically, the best time for a borrower to address this is before repossession. There may be options to refinance or use debt forgiveness measures to pay the charge-off.
Since you have a charge-off on your credit report, this may have a devastating effect on your credit and affect your ability to get loans in the future. To mitigate this risk, make sure to purchase a car that’s within your means. Don’t overspend or spend every cent offered by the bank during the preapproval process.
One way to save money to pay your car loans is to compare insurance rates with the quotes on the Jerry app. Jerry will give you quotes from up to 50 providers so you always get the best price for the coverage you need.
Eric Schad
Answered on Nov 04, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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